According to customs data, from January to July this year, Jiangsu exported 1.286 million tons of coke, valued at $220 million. This represents a 12.3% decline in volume and a 17.2% drop in value compared to the same period last year. Analysts attribute this slowdown in exports to the recent increase in export tariffs, which have significantly raised costs for local producers.
The Chinese government imposed a 5% export tax on coke starting November 1, 2006, aimed at protecting domestic resources, reducing environmental impact, and curbing overcapacity. On June 1 this year, the tax was further increased to 15%, leading to higher production costs and a noticeable slowdown in export activity. As a result, many companies are now facing reduced competitiveness in international markets.
It's also important to note that rising coke prices may lead to uncontrolled expansion within the industry. Over the past year, domestic coke prices have risen six times, with per-ton prices increasing by nearly 300 yuan. This has boosted company profits but also raises concerns about long-term sustainability. While growth is positive, it’s crucial to address three key risks: overcapacity, environmental pressure, and excessive investment.
First, the surge in prices has encouraged small-scale producers to restart operations, while larger firms have ramped up output. According to National Bureau of Statistics data, monthly coke production growth exceeded 18% in the first five months of this year. With over 50 million tons of new capacity under construction or planned, there's a risk of supply outpacing demand in the near future.
Second, the environmental impact of coking remains a major concern. The recycling rate of by-products like coke oven gas, coal tar, and crude benzene is low, leading to significant pollution and waste. Annually, around 80 billion cubic meters of coke oven gas are produced, but roughly 25 billion go unused—often released into the air or burned inefficiently. This results in an estimated annual economic loss of over 5 billion yuan.
Third, the industry is witnessing a surge in investment due to high prices, which could lead to overbuilding and excess capacity. If not managed carefully, this could create a cycle of boom and bust. Experts warn that as policy-driven capacity reductions continue, non-compliant producers risk being phased out.
In response, state authorities are considering stricter measures to eliminate outdated production capacity. By 2009, 80 million tons of obsolete coke capacity are expected to be removed. As the industry continues to evolve, maintaining balance between growth and sustainability will be critical. Rising prices alone are not a sign of long-term health; steady, controlled development is the true path forward.
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