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By Gong Zhengzheng (China Daily)
Updated: 2007-08-16 06:57

China, the world's biggest coke producer and exporter, is considering new curbs on overseas shipment of the fuel used to make steel, as part of its efforts to reduce pollution at home.

Related readings:  China's coke export price plunges  Most expect fuel prices to rise  Steel industry expects stable prices next year  Restriction measure continued on coke export

Hou Shiguo, an official from the National Development and Reform Commission, China's top industry watchdog, told China Daily the government is likely to further up tariffs on coke exports in the second half of this year.

The government is also considering cutting coke export quotas for trading firms and raising the qualification for the business, Hou said.

But he did not reveal the details of these new measures.

On June 1, China lifted the tariff on coke exports to 15 percent from 5 percent in a bid to rein in overseas shipment.

January-July coke exports jumped 20.1 percent year-on-year to 9 million tons, boosted by strong demand and prices in the international market, according to Customs data.

"We should not ship so much coke abroad at the cost of our environment as the sector is highly polluting," Hou said.

China has granted two batches of coke export quotas totaling almost 13.3 million tons so far this year.

Huang Jin'gan, president of the China Coking Industry Association, predicted 2007 coke exports would reach 15 million tons, up from 14.5 million tons last year.

In the first six months of this year, coke production in China grew 21 percent to 156.8 million tons. Huang said full-year production will hit 320 million tons, up from 298 million tons in 2006.

China has a total coking capacity of 360 million tons. A new 10-million-ton capacity will be put into operation in the second half of the year, according to the market buzz.

But Hou said the government will raise the doorsill for new investment in the sector and speed up elimination of outdated capacity to ward off a domestic glut.

Some 80 million tons of obsolete coking capacity will be removed from 2006 to 2010, according to an earlier government plan.

Huang said coke producers should "watch the market closely" and prevent excessive production growth as demand for the material is likely to slow down in the second half because of slackening steel production.

In the first half, coke consumption in China rose 21.5 percent to 148.8 million tons.

Crude steel production in the country, the world's top manufacturer of the metal, is expected to grow by 14 percent to 480 million tons this year, down from 19 percent in the first six months.