China’s Nanjing Iron & Steel to invest in coke project in Indonesia

Monday, 23 November 2020 15:07:40 (GMT+3)   |   Shanghai
       

Jiangsu Province-based Nanjing Iron & Steel Co., Ltd has announced in a filing to Shanghai Stock Exchange that it will invest in a coke plant located in Indonesia due to the stricter environmental rules in China, thus building a new capacity closer to major global coking coal exporter Australia.

Accordingly, the coke plant in question will have an annual capacity of 2.6 million mt, with an estimated investment of $383.484 million.

China produced 471.26 million mt of coke in 2019, up 5.2 percent year on year, while it produced 390.99 million mt of coke in the first ten months this year, down 0.7 percent year on year. China has taken strict measures to reduce pollution, including shutting down old coking plants, which has bolstered coke prices.

Coke futures prices at Dalian Commodity Exchange (DCE) surged to RMB 2420.5/mt ($368/mt) on November 23 from RMB 1,868/mt on January 2 this year, up 29.6 percent, as coke capacity has been under pressure.

Nanjing Iron & Steel said that its subsidiary Hainan Province-based Jinmancheng Technology Investment Co., Ltd., Tsingshan Holding Group, Guangdong Province-based J-eray Technology Group, PT. Indonesia Morowali Industrial Park and Hainan Province-based Dongxin Business Management Partnership Ltd. would set up a joint venture called PT. KinRui New Energy Technologies Indonesia, to build the coke plant at Morowali Industrial Park in Indonesia.

Nanjing Iron & Steel will hold 78 percent in the joint venture through its subsidiary Hainan Jinmancheng, it said.

“Indonesia is closer to the major coking coal exporter Australia, and transportation fees are comparatively low,” Nanjing Iron & Steel said in the filing.

China has stopped taking coal shipments from Australia amid escalating tensions between the two countries.

Currently, the investment is pending approval from both governments, Nanjing Iron & Steel said, adding that there is a risk that the project would be subject to antidumping duties in China, which currently levies such tariffs on coke imports.


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