Insight
Fighting for survival: will recovery equipment save China's coke industry?
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Report summary
China's metallurgical coke industry is in a state of depression, fighting for survival. The sector started to consolidate in 2013, posting losses of US$400 million in 2014; with demand down by 5% and losses of c. US$2 billion so far in 2015 there is no immediate end in sight. Around half of China's coke firms are loss making according to government sources. To arrest this decline, China's coke industry has proposed entering new value chains. We expect coke producers to invest in new technology to commercialize output from coking, mainly gas and methanol. Merchant plants will be the primary investors, although access to finance and weak coke demand are two key constraints. These investments are not enough to fix the primary problem of the coke industry – weak steel demand. Higher coke production to chase new markets may actually increase oversupply in China's coke market, with additional exports supressing seaborne coke prices further.
Table of contents
- Executive summary
- Background
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Assessing the options: gas v. methanol markets
- Methanol
- Natural gas
- Supply side response: the impact on APAC coke markets
- Limits and risks
- Conclusion
Tables and charts
This report includes 5 images and tables including:
- Recovery products from coke production
- Coke plants distribution
- Domestic coke production and export price, Mt, $/t
- Cost comparison coke gas, coal and natural gas (Shandong, US$/t)
- Cost comparison between coke gas and natural gas, (Shandong, US$/mmbtu)
What's included
This report contains:
