‘Coke price to remain high’

‘Coke price to remain high’

Huang Jigang, Director General of the Chinese Coking Industry Association, expressed yesterday (March 29) that global coke prices will remain high due to tight transportation and high manufacturing costs. Mr. Huang said that he did not expect any major fluctuations in the high price level, but added that some areas may experience certain price modifications from time to time. According to Mr. Huang, even though the global economy may shrink somewhat, overall global development will still be good enough to drive increased steel consumption. He predicted that global crude steel and pig iron output might reach 1.1 billion tons and 770 million tons respectively in 2005. Such production would undoubtedly push market demand for coke and support the current high prices. As for China’s domestic coke market, Mr. Huang pointed out that China’s coke output in 2004 broke 200 million tons. This production met market demand at the high price level. Judging from China’s GDP, import/export, investments and steel consumption trend in 2005, it is estimated that China’s crude steel and pig iron output may exceed 320 million tons and 300 million tons respectively. This would equate to 225 million tons of coke demand, 25 million tons more than in 2004. Meanwhile, Mr. Huang has said that China’s coke output would continue to grow in 2005, thus helping to mitigate the tight coke supply situation. Based on his calculation, China may add 35 million tons of coal output in order to meet demand for the additional 25 million tons of coke in 2005.