On April 17, the reporter learned from the Shanxi Coke Industry Association that some large-scale coking enterprises in Shanxi recently issued price-raising letters to all their users, and clearly stated that the price of ton per ton of coke from that day would be 40 yuan. A person from the Shanxi Coke Industry Association said: "Shanxi's coke price increase is imperative. We will give support. I believe there will be more coking enterprises participating in this collective price increase action."
Shanxi is a major province of coke. Last year, coke production exceeded 80 million tons, and coke exports reached 12 million tons. Coke production and exports accounted for 40% and 80% of the country respectively. Export coke accounted for 50% of the total trade volume in the international market. In the first half of 2005, coke gradually changed from the seller's market to the buyer's market, and overcapacity caused prices to continue to decline. In the second half of 2005, the price of coke in Shanxi Province has already fallen below the bottom line of the cost, with a loss of 100 to 200 yuan per ton of coke produced. In the international market, Shanxi coke has rapidly dropped from about US$400/tonne to 120 US$/tonne, with a loss of about US$50 per ton. From this year onwards, Shanxi's coke industry is facing a double squeeze in the sharp rise in coal prices and the collapse in coke prices. Shanxi coking enterprises have suffered losses across the board.
Experts in the industry believe that at present, Shanxi coke has objective conditions for price increase: First, Shanxi has successively banned a large number of small soil coke, and the problem of soil coke and press coke is basically solved. Second, in June of last year, 243 coke production enterprises affiliated with the Shanxi Coke Industry Association jointly signed the “Securities and Self-Discipline in the Coke Industry in Shanxi Province†and the “Cash Industry Self-regulation Convention in Shanxi Provinceâ€, and hundreds of coking enterprises in Shanxi Province have extended the coking time. The production of coke in the province was reduced by more than one-quarter compared with normal production. In addition, 172 illegal coking projects were shut down last year, and the total production of coke in Shanxi Province was reasonably controlled. The amount of coke backlog in the port dropped drastically, and the oversupply situation basically changed. Third, from the beginning of March this year, the nation’s steel prices have risen, and coke has accounted for more than 30% of the cost per ton of steel. The rise in steel prices has provided support for coke prices. Fourthly, Shanxi Coking and Chemical Co., Ltd. realized that in a “big ups and downs†it has been difficult to stand the test of market risk and has a strong sense of establishing a sales alliance.
It is understood that the Shanxi Coke Industry Association will take corresponding guarantee measures for this joint price increase.
Shanxi is a major province of coke. Last year, coke production exceeded 80 million tons, and coke exports reached 12 million tons. Coke production and exports accounted for 40% and 80% of the country respectively. Export coke accounted for 50% of the total trade volume in the international market. In the first half of 2005, coke gradually changed from the seller's market to the buyer's market, and overcapacity caused prices to continue to decline. In the second half of 2005, the price of coke in Shanxi Province has already fallen below the bottom line of the cost, with a loss of 100 to 200 yuan per ton of coke produced. In the international market, Shanxi coke has rapidly dropped from about US$400/tonne to 120 US$/tonne, with a loss of about US$50 per ton. From this year onwards, Shanxi's coke industry is facing a double squeeze in the sharp rise in coal prices and the collapse in coke prices. Shanxi coking enterprises have suffered losses across the board.
Experts in the industry believe that at present, Shanxi coke has objective conditions for price increase: First, Shanxi has successively banned a large number of small soil coke, and the problem of soil coke and press coke is basically solved. Second, in June of last year, 243 coke production enterprises affiliated with the Shanxi Coke Industry Association jointly signed the “Securities and Self-Discipline in the Coke Industry in Shanxi Province†and the “Cash Industry Self-regulation Convention in Shanxi Provinceâ€, and hundreds of coking enterprises in Shanxi Province have extended the coking time. The production of coke in the province was reduced by more than one-quarter compared with normal production. In addition, 172 illegal coking projects were shut down last year, and the total production of coke in Shanxi Province was reasonably controlled. The amount of coke backlog in the port dropped drastically, and the oversupply situation basically changed. Third, from the beginning of March this year, the nation’s steel prices have risen, and coke has accounted for more than 30% of the cost per ton of steel. The rise in steel prices has provided support for coke prices. Fourthly, Shanxi Coking and Chemical Co., Ltd. realized that in a “big ups and downs†it has been difficult to stand the test of market risk and has a strong sense of establishing a sales alliance.
It is understood that the Shanxi Coke Industry Association will take corresponding guarantee measures for this joint price increase.
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