Illawarra Coke Company, one of Australia's major exporters of metallurgical coke, shut its Coalcliff plant in late June due to a slowdown in seaborne exports and weak spot prices, a source familiar with the matter said Friday.
The decision to shut the plant, which produces up to 125,000 mt/year of met coke, was made in December last year, the source said. This coincided with the China's decision to lift its 40% export tariff on met coke.
China was the world's largest exporter of met coke till 2008 when the government imposed export tariffs to cut its seaborne exports. The country's re-entry into the export market this year has led to a fall in seaborne exports by Japanese, Russian, Ukrainian and Australian producers.
Chinese coke and semi-coke exports in the first half of the year have almost tripled to 1.5 million mt compared with H2 2012 when the export tariff was still in force.
A result of China's re-entry in the spot market is also that met coke spot prices have hit a six-year low. Chinese 62% CSR and 12.5% ash met coke was assessed at $231/mt FOB Tianjin Thursday. The last time met coke was priced this low was in June 2007 when the Platts 62% CSR with an ash content of 10-12.5% was assessed at $245/mt FOB.
Illawarra Coke owns two coke plants - Coalcliff and Corrimal. The former was a plant that catered to the seaborne market while the latter continues to supply the domestic Australian market, which is locked up in contracts.
Illawarra Coke is the only independent producer of met and foundry coke in Australia and has been privately owned since 1996. Bluescope Steel and OneSteel are the other major Australian met coke exporters.
Met coke products from Australian producers typically trade at a premium in the spot market to materials from other regions due to higher coke strength after reaction, or CSR, and consistent quality.