Pandemic to weaken China’s coke production for coal shortage

China may see more coking plants cut output due to coking coal supply shortage as the top feed coal production province Shanxi is likely to tighten transport again after a spike of infected cases.

Taiyuan, the capital city in Shanxi, detected seven COVID-19 cases in an express distribution center in Qingxu county including four confirmed cases on April 13, and some local sources told Sxcoal more than 30 employees in the center have been tested positive for the initial screening after the seven cases.

Taiyuan and some other cities in the province tightened transport links again to contain the potential spread of virus. This is expected to further add strain to coking coal supplies, which have been in weak liquidity due to persistent traffic controls.

At least two coking plants in Taiyuan were heard to have cut production by 20-50% as stringent cross-city and region transportation limited the availability of coking coal supply and  

Sxcoal data showed coke stocks held by the surveyed coking plants stood at 381,00 tonnes on April 11, down 68,000 tonnes from the preceding week after four straight weeks of rising. The decline came mainly as the shipments from Shanxi to Hebei improved along with Tangshan’s lifting of its city-wide lockdown and also due to restrained coke production amid weak feed coal intakes.

Coke producers in central, western and eastern China were also heard to have imposed production caps in varying degrees.

Jiangsu, the second-largest coke production province in eastern China, witnessed 30-70% decline in capacity utilization in some local coking plants due to coal supply disruption.

The flare-ups of virus are also hindering coke supply to steel mills. Sxcoal learned from some mill sources from Hebei and Jiangsu that their replenishing efficiency for coke remained weak due to intensive transportation inspections, and the situation seemed unlikely to ease in a short period due to still high daily increment of cases.

China reported 2,999 new locally-transmitted COVID-19 cases on April 13, according to the National Health Commission. With the country’s financial hub Shanghai remained in its hardest war against the virus, with daily increment exceeding 2,000 during the past week.

Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.