Xinhuanet cited Mr Wang Qingtao, chairman of Shandong Coking & Chemical Industry Association as saying lately that steel demand in Shandong in the second half of next year will overtake this August record alongside the expanding investment in local railway construction and the gradual reviving housing and manufacturing sectors, and coking industry is poised to recover by that time.

 

Mr Wang believes the railway construction will drive up local steel production directly, and benefit upstream coke industry. It's learned that steel consumption takes up some 30% of the investment in railway construction, that is to say, the spending in local railway sector in coming years would bring some CNY 50 billion demand in steel market. This coupled with the warming up of real estate and manufacturing industry would send local steel production exceeding 45 million tonnes the peak level posted in this August by the end of next year.

 

He said that about 30% outdated coking capacity will be eliminated by next year end as per the central government's request to close below-3.8 meters coke oven by the end of this year and shut down all coke ovens below 4.3 meters prior to the end of next year.

 

Mr Wang said the production cut will drag on in the period in coking industry in a bid to secure some profits. Meanwhile, some leading coke producers need to upgrade their equipments in the period to prepare for the steel production increase in near future.

 

 

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