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Coke that contains more than 0.6% sulphur or 15% ash is now banned in the city, according to an announcement by the local government on September 30.
The new regulation came into effect on October 1, and the relevant department from the local environmental protection ministry will carry out regular checks to ensure the rule is followed.
Grade II coke has a sulphur content of 0.61-0.8% and ash content of 12.01-13.5%.
Grade I coke’s sulphur content is generally below 0.6%; its ash content is lower than 12%.
“Grade II coke is not within the acceptable range specified by the Tangshan government. Steel mills in Tangshan city are expected to shift to coke of better quality, which will increase their production cost by 10-20 yuan per tonne,” a trader in Shanghai said.
“Large steel mills mainly consume Grade I coke, while small and medium-sized mills in Tangshan generally use Grade II coke. If the rule is enforced strictly, these smaller mills, which account for about 40% of the region’s total coke consumption, will have to change their feed,” an industry analyst in Beijing said.
“Grade II coke producers in the region will have to lower sulphur content of their products, while keeping their CSR rate unchanged, to meet the standard,” another industry analyst in Beijing said.
Some market participants expressed concern over the regulation, saying “the standard is too high”.
It effectively bans all Grade II and even some Grade I coke that may contain up to 0.65% sulphur that steel mills use.
Furthermore, the standard coke contract on the Dalian Commodity Exchange has a sulphur content not exceeding 0.65%.
The Tangshan government has also banned the trading and consumption of thermal coal with a sulphur content exceeding 0.6% or ash content exceeding 15%, even during winter.
Specifically, companies that provide heating during winter are not allowed to consume thermal coal with over 0.8% sulphur content or 16% ash content.