Shanxi Province-based Chinese state-owned coal mining conglomerate Shanxi Coking Co., Ltd has announced that in the first half of this year it registered an operating revenue of RMB 3.404 billion ($0.48 billion), down 2.98 percent year on year, while posting a net profit of RMB 767 million ($108.9 million), down 6.78 percent year on year.
In the second quarter of the year, Shanxi Coking’s coke output and sales volume amounted to 791,200 mt and 778,700 mt, up 29.49 percent and 23.31 percent compared to the first quarter. In the first quarter, coke output and sales volume had amounted to 611,000 mt and 632,000 mt, down 18.39 percent and 22.37 percent from the fourth quarter of 2018.
The relatively high prices of coal and low prices of coke in the first half of the year negatively affected the profitability of coking plants in China.
Currently, China is actively promoting the elimination of backward capacities in the coking industry. For instance, China’s Ministry of Ecology and Environment (MEE) has required coke producers with coke ovens of less than 4.3 m in Hebei and Shanxi provinces to speed up elimination, while new capacity cannot be built except via capacity replacement, and so coke supply is expected to decline in the future.
Meanwhile, Shandong provincial government has issued its elimination target of 10.31 million mt of coking capacity in 2019, while it plans to eliminate 6.55 million mt of coking capacity in 2020.
With the focus currently on reducing capacity in the coking industry in China, the profitability of the industry is expected to improve.