The price of coke will continue to stay at a high level this year amid surging demand and rising cost, according to the China Coking Industry Association (CCIA).

Huang Jingan, CCIA chairman, said at a conference in Beijing that increasing demand from the steel industry will largely boost the price for the key residue used in the smelting process.

China's steel industry produced about 959.2 million tons of crude steel and iron last year, and consumed 90 percent of the country's coke output. "Consumption will continue to rise amid growing steel and iron output this year," Huang said.

According to a Union Bank of Switzerland (UBS) report, coking coal output in the world is expected to stand at 211 million tons this year, while the demand may hit 221 million tons.

Demands from China, India and Brazil will remain robust among other countries, the report said.

CCIA statistics show that China's current export price of coke is 500 U.S. dollars per ton, representing an increase of 150 percent over last year when the average price was 199.60 U.S dollars per ton.

At the same time, thousands of small- and medium-size coke plants were closed down in a bid to save energy and reduce emissions, which may lead to a reduction in output capacity, said a market analyst.

In addition, China is to eliminate another 70 million tons of coke production capacity in future, according to the National Development and Reform Commission. "As the government has raised duties and charged more pollutant tax on coke products, the coke plants have to afford more expense, " Huang said. "The growing expansion of coke production will certainly be passed onto the price."

China is the largest coke producer in the world, accounting for 60 percent of world production in 2007.

(Xinhua News Agency March 31, 2008)