Efforts by the government and industry to curb the oversupply of Chinese metallurgical coke were much discussed at the 11th China International Coking Technology and Coke Market Congress in Guangxi Wednesday.
Chinese coke producers "must intensify the structural adjustment" of the industry to resolve the issues of oversupply and pollution, Deputy Director of Industrial Policies at the Ministry of Industry and Information Technology of China Xin Renzhou said at the opening panel discussion.
Echoing this, Director General of the China Coking Industry Association Huang Jingan said: "We shall try to seek economic growth by seriously implementing industrial self-regulation and controlling total production."
The issue of overcapacity is illustrated by the sharp contrast between estimated Chinese coke capacity of 600 million mt in 2012 and actual production of just 443 million mt.
In addition, a coking industry association survey showed that around 44% of coke plants surveyed were in the red this year with some of their losses up 7.64% year-on-year.
In terms of policy measures, approaches include closures of outdated coke production facilities and the re-organization of the industry structure, Xin said.
In the former policy area, Shanxi province is to eliminate 40 million mt of outdated coke capacity from 2012-15, Xin said, which would keep its capacity rate at 120 million mt. Shanxi is a key coke producing region, accounting for 20% of national output.
This signals a continuation of existing Chinese policy. In July, MIIT released a list of coke enterprises to be shut down, removing 16.3 million mt of capacity.
Xin told Platts it was hard to put a figure on the optimum level of coke production rate for which the ministry would aim because it would change according to the market situation.
MIIT is also proposing mergers and integration for some smaller-scale coke enterprises to increase industrial concentration and boost efficiency, Xin said. He estimates that there are still about 800 producers in China.
