China's environmental policy piles pressure on metallurgical coke sector

The increased emphasis on emissions reduction in China, and recent success in steel and coal supply reform, are likely to see a shift in focus towards the coke sector. Xuzhou, in Jiangsu province, recently passed laws requiring all coke plants to install dry-quenching equipment. The ruling is poised to spread within broader China, aiming to reduce emissions and water use at coke makers, lower coke capacity, and lift average utilisation rates and industry concentration, thereby improving profit margins. The long-term benefits of a sustainable coke industry will be felt by all those that supply raw materials. However, artificial coke production limits will undoubtedly complicate an already volatile environment for coking coal demand in China.