In the first half of 2007, China's coking industry continued to show a trend of structural adjustment, technological advancement, strong demand, and rapid growth in production and consumption. However, as macroeconomic regulatory measures became more evident in the second half of the year, uncertainties increased, particularly with potential declines in steel product exports, which raised concerns about market risks. These insights were shared by Jin Qiang, president of the China Coking Industry Association, during an industry briefing.
The first half of the year saw a significant rise in both coke production and demand. This was driven by the rapid development of industries such as iron and steel, chemicals, non-ferrous metals, and machinery manufacturing. From January to June, crude steel and pig iron output—accounting for 87% of total coke consumption—increased by 18.92% and 16.84%, respectively. Coke usage in ferroalloy and calcium carbide production rose by 35.33%, while foundry coke output grew by 32.15%. As a result, daily coke production climbed from 775,400 tons in January to 963,000 tons in June, an increase of nearly 190,000 tons.
Coking coal enterprises above the designated size produced 158.81 million tons of coke in the first half of the year, up 21.0% year-on-year. Domestic coke consumption reached 148.76 million tons, reflecting a 21.54% increase. Exports also rose by 22.4% to 8.05 million tons. The growing demand from both domestic and international markets was supported by rising coke prices, which increased by 100 yuan per ton between January and June. Profitability improved significantly, with large-scale coking companies reporting a profit of 4.033 billion yuan, an 8.53-fold increase compared to the previous year.
Despite this positive performance, only 67.32% of enterprises turned a profit, with many still operating at a loss. New production capacity was added rapidly, with 9.95 million tons of new capacity coming online in the first half of the year, and another 10 million tons expected in the second half. Although some outdated facilities were phased out, the expansion of modern coke ovens outpaced the reduction in obsolete ones, leading to overcapacity concerns.
Domestic coke production grew by 21% year-on-year, outpacing the 17.88% growth in pig iron production. By June, coke output growth dropped to 18.4%, while pig iron growth fell to 13.68%, widening the gap. According to the China Iron and Steel Association, steel consumption is expected to reach around 446 million tons in 2007, a 12% increase, with crude steel output reaching 480 million tons, up 14%.
Coal production remained strong, with 1.082 billion tons of raw coal produced in the first half of the year, a 11.4% increase. However, coking coal exports declined sharply, falling by 31.85% to 1.5735 million tons. To meet domestic demand, coking coal imports rose by 18.03% to 2.8185 million tons.
In June, the export tariff on coke was increased from 5% to 15%, prompting companies to accelerate exports before the change. May saw 1.61 million tons exported, while June dropped to 1.3 million tons. With the higher tax, export costs are expected to rise by $16 per ton, though current contracts have absorbed most of the impact. Annual coke exports are projected to remain near last year’s level, possibly slightly exceeding it.
To ensure sustainable development, the industry must focus on optimizing its structure, controlling overcapacity, and promoting energy efficiency. Enterprises should continue to limit production, eliminate outdated facilities, and strengthen supply-demand balance. They should also integrate upstream and downstream industries, develop coal resources, and enhance cooperation with steel producers. Finally, adherence to environmental regulations and the implementation of industry guidelines will be crucial for long-term stability and social responsibility.
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