China's Coking Industry Caught in Dilemma Amid Production Cut of Steel Makers
China's coking industry caught in dilemma amid production cut of steel makers
China's coking industry has been caught in a dilemma, due to sluggishness on the markets of iron, steel and coal, and it may go through a tough adjustment period in 2009, said Huang Jingan, president of China Coking Industry Association.
According to statistics, the total crude steel output in 66 major steel-producing countries amounted to 108.4 million tons in Sept., down 3.2 percent on year and 3.7 percent on month, and of the output decease, China accounted for 70 percent.
In October, the production utilization rate of American steel enterprises fell to the lowest level of the past four years. Since November, steel enterprises all over the world have cut their production, which directly reduced the demand for coke.
On domestic market, the national coke output fell by 9.9 percentin Sept and consumption volume went down 11.47 percent on year. For declining demand, coke price has slid for three consecutive months since July, while the coking coal price has remained at high level, resulting in negative profit margin of coking enterprises.
In order to lessen the loss caused by high coking coal price andthe down beat of steel market, coking enterprises in Shanxi, the largest coal and coke producing province in China, have cut their output by 50 percent in Sept, and further cut their coke output by 20-30 percent in Oct.
However, the production cut is still not enough to reverse the present market crisis, said Huang Jingan. He suggested coking enterprises control their aggregate output to match consumption.
