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Shanxi coke cuts: good or bad for metallurgical coal?
Report summary
In August, Shanxi province introduced new specific measures and action plans to cut 40 Mt of coke capacity, to 147.7 Mt, in 2019. The move is designed to accelerate improvements in the sector’s pollution levels, and reduce excess capacity. Policies aimed at cutting coke capacity will carry the risk of affecting metallurgical coal demand but, as always in China, the impact will be nuanced. Replacement ovens, and shifting production centres, offer challenges and opportunities for those involved in the seaborne metallurgical coal market.
Table of contents
- Introduction
- Shanxi cuts represent a major capacity clean-up
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What are the short-term implications of these policies in Shanxi?
- 1. There will be no reduction in operating coke capacity
- 2. In fact, we expect coke production in Shanxi to increase in 2019
- 3. The closure of 4.3 metre coke ovens has actually been delayed under the new policy
- How has the new policy affected other provinces?
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Broader implications for the Chinese coke sector and metallurgical coal demand
- 1. Coke production in China will shift locations
- 2. China's coke sector health will improve
- 3. Higher quality coking coals will be required in some cases
- 4. Imports may benefit from lower coastal deliveries from Shanxi
- Conclusion
Tables and charts
This report includes 2 images and tables including:
- Shanxi coke plant capacity cuts by city
- De-capacity targets and impacts in four coke producing regions in 2019
What's included
This report contains:
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