China's met coke capacity to rise by 19 mnt pa this year

China will see a net increase in metallurgical coke production capacity of 19.22 million tonnes (mnt)/year this year, the findings of Mysteel's latest industry survey showed.

By end-December, a total of 14.12 mnt/y of outdated coke capacity mostly small-scale inefficient facilities that are heavily polluting is scheduled to be stopped and scrapped nationwide, Mysteel's research showed, as part of Beijing's efforts to achieve carbon peak by 2030 and carbon neutrality by 2060.

On the other hand, within this year some 33.34 mnt/y of new met coke capacity will likely be brought onstream, more than compensating for the shut capacity and result in a net growth in installed capacity this year of 19.22 mnt/y, the data showed.

As of 17 May, China had eliminated 5.2 mnt/y of coke capacity this year while adding 10.4 mnt/y, meaning a net increase of 5.2 mnt/y, the survey results showed.

Assuming the new coke-making facilities are added as planned, the net growth of 19.22 mnt/y this year will mark a step back from a last year's net reduction of 5.43 mnt/y. Last year, domestic coke producers back-peddled on installing new capacity due to meagre profit margins caused by slack demand from steelmakers.

On the other hand, this year's expansion would be lower compared with the net growths of 26 mnt/y in 2021 and 25.5 mnt/y in 2022, Mysteel Global noted.

China's central and provincial governments initiated policies in 2016 to phase out backward coke-making capacities as part of national supply-side reform, with the campaign gaining new momentum today as part of Beijing's carbon emission reduction goals, Mysteel Global noted.

This year North China's Inner Mongolia Autonomous Region will make the largest contribution to the reduction target by shutting 11.22 mnt/y of coke capacity 79.5% of the national elimination target. Inner Mongolia China's second largest coke-producing hub after Shanxi province will also add 10.25 mnt/y of new capacity this year, the survey results showed.

The capacity upgrades in Inner Mongolia's Wuhai city, a leading coke-producing hub, will allow some local coke plants to produce the second-grade or quasi-first-grade dry-quenched coke that are favoured by steel mills in Inner Mongolia, Northwest China's Ningxia, North China's Hebei, Northeast China and East China, survey respondents observed.

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.