Chinese Coke Market May Get Aid after Shanxi's New Anti-Pollution Efforts

China's coke market is currently under the wait-and-watch situation to see whether the recently launched three-month campaign by North China's Shanxi province which aimed at verifying whether the local environmental pollution issues will be rectified and result in production disruptions and lead coke prices to rise.

Commencing July 1, Shanxi's provincial Department of Ecology and Environment is dispatching eleven inspection teams to visit industrial enterprises in the province's eleven major cities over the coming 100 days to check on pollution-related matters including the status of pollution reduction facilities, according to a release by the department on June 29. All industries will be covered but coke-making is one of the primary targets during the said inspection.

As per earlier reports, China's Ministry of Ecology and Environment (MEE) in Beijing charged that local government authorities in the Shanxi cities had not fulfilled their obligation to reduce pollution, particularly in relation to Shanxi's coking industry - a very public and high-level rebuke that at the time led many coke-market watchers to envisage production cuts while problems were rectified.

The Shanxi provincial government was ordered to submit a plan to China's state council by mid-June spelling out how it proposed to improve air quality. Though no plan was publicly released, market watchers say the recent dispatch of the teams appears to be Shanxi obeying the central government's directive in the country's ongoing battle with pollution.

The Shanxi's provincial Ecology Department gave no specific date for when the inspection visits would end. However, the stated 100-day duration of the campaign, the inspections should be completed by early October - which coincidently overlaps with celebrations to mark the 70th anniversary of the foundation of People's Republic of China on October 1 (celebrations which Beijing would not like to see literally clouded by pollution issues).

Ahead of the checks by the provincial authority, those industries in Shanxi whose emissions of pollutants are regarded as significant had been ordered by the provincial environment department to undergo self-checks through June.

Shanxi is China's largest coke-making center, whose clients cover traders and steelmakers across North and East China. During 2018, Shanxi produced 92.6 MnT of coke, accounting for 21% of China's total, according to the country's National Bureau of Statistics.