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Shanxi, China’s largest coke-producing province, saw its share of the national output fall below 20% for the first time, prompting a consolidation within the industry.
“The weakened demand and fiercer competition have been giving Shanxi coke producers a hard time, and inevitably coke production from the largest coke production province fell,” Huang Jingan, chairman of China Coking Industry Assn said.
The province produced 27.94 million tonnes of coke during the first four months of 2012, down 2.9% year-on-year, whereas China’s total coke output increased 6.4% on an annual basis to 144.55 million tonnes, according to the National Bureau of Statistics.
Shanxi’s output represents only 19.3% of China’s total.
“Shanxi, as a coke-producing province, mainly supplies coke to steel mills in other provinces. And after prices fell and new coke production capacities came on stream in northwestern China, Shanxi lost some of its edge,” Huang said.
“But it is good timing for Shanxi to carry out industry consolidation to eliminate those outdated capacities,” Huang said.
According to Shanxi’s coking industry consolidation guidelines released in November 2011, the province aims to reduce the number of coke producers from the current 202 to no more than 40 by 2015.
Shanxi also wants to establish four large coke production industry zones, with production capacity of more than 10 million tpy each.
The province’s coke production capacity currently stands at 129-180 million tonnes based on a production utility rate of 50-70% and 2011’s output.
In 2011, Shanxi produced 90.479 million tonnes of coke, accounting for 21.2% of China’s total. In 2010, the province produced 83.799 million tonnes, which amounted to a 21.9% share of the national output.