Euro Coke 2006 was held in Dusseldorf, Germany, from 10-12 April 2006.

SteelRX CEO Y P S Suri presented a paper on Indian Coke Market Update. A summary of some of the issues dealt with is given below:

Steel Scenario

Consolidation is the emerging trend to contain high price volatility in steel. While the price rise in the past few years happened due to phenomenal supply growth in China, the price downslide was a result of the Chinese slowdown as well as the destocking phase. Steel plants these days are resorting to production cuts to stabilize prices, heralding an era where profit margins have a stronger focus than volumes alone. Luckily for India, demand growth has been very good, ensuring stability in prices at the lower level.

Global analysts point out that the Chinese steel industry has become more fragmented in the last years instead of consolidating. In 2000, the Top Ten producers accounted for 47.5 per cent, which fell to 35 per cent in 2005. China is now aiming to achieve 50 per cent by the Top Ten by 2010 and 70 per cent by 2020. In comparison, the Top Six Indian steel companies currently account for over 66 per cent supply.

The future will see emerging new technologies with larger blast furnace capacities having greater efficiency, leading to higher quality of steel flat products. Outdated high cost polluting plants will be on the way out and flat production will continue to lead.

Coke Scenario

Coke prices have slumped in the past few months. Though global steel prices headed southwards last year, they were still robust despite economic growth not being so good. All this while, China’s coke supply has soared, and it has continued to be more than relative demand by steel industry. Export of coke was the natural outcome, leading to price collapse in the global arena. A Chinese market research company predicted last week that the domestic Chinese coke demand and supply would balance out by 2010.

Blast furnaces would continue to be the mainstay of steel making. This would also mean rising demand for higher quality of coking coal. There will be more and more focus on understanding coke reactions and performance to optimize results. Coke ovens will prove to be a valuable asset in this raw material supply chain, which will continue to thirst for high quality hard coking coal.

China is a net importer of coking coal now, and so is India. The steel industry in India has an ever-rising demand for good quality imported coking coal. The Chinese coke prices have created havoc with the stand-alone merchant coke ovens, which do not have captive mines.

Can anyone predict coke prices this year? Only an optimist can say that coke prices would go up!