Coke consumption could rise to 750Mt by 2015 as Asia continues its growth.
Most of the demand will be from China and India as the two countries continue their infrastructure development.
Speaking at the Eurocoke Summit 2011 organised by IntertechPira, Helen O’Malley of CRU Analysis discussed Recent Developments and Outlook for Steel, Coal and Coke.
She said coal and met coke prices had recovered swiftly form the 2008/09 downturn. After reaching a bottom in early 2009 met coal prices have reached about $350/t in early 2011, mainly due to the tight market supply as a result of the Queensland floods in Australia.
Globally coke in hot metal production hit a record in 2010, but excluding China it was lower than in 2007.
China is no longer a major exporter to the international market due to an export tax introduced in 2008, which also coincided with a collapse in demand.
By March 2010 prices became high enough for China to begin exporting again – and its exports helped balance the market. Its exports helped set a ‘floor’ price for coke on the international market.
The only relief for steel mills is that freight prices are lower now in 2008 they made up 30% of costs compared to 5% today.
In conclusion she stated that the tight market is likely to keep coke prices high for the remainder of 2011, at least until Australia restarts its capacity damaged by floods. Chinese exports must remain active to keep the market in balance, leaving prices elevated.
A full report of the Eurocoke Summit 2011 will be published in a forthcomin issue of Steel Times International.