Source: CCTV.com

11-19-2008 13:47

Coke prices will now be decided through negotiations between the coke and steel industries. The two sectors have just set November prices and will negotiate future prices on a monthly basis.

Coke prices will now be decided through negotiations between the coke and steel industries.

Heavy market speculation and the global financial crisis jointly pushed up coke prices in the first half of the year, and hammered them down in the second half. Coke producers say their production and sales activities suffered from this unprecedented fluctuation. Coke makers in Shanxi province alone lost three billion yuan this year. Steel makers were also unhappy about their changing material costs.

Zhou Dadi, Energy Analyst said "The fluctuation of coke prices between several hundred yuan per ton and several thousand yuan per ton means that a totally free market cannot work on its own. That was also proven by the recent experiences in the US financial market."

Experts say coal and coke prices in China had been set by the market, where speculators were buying or selling too quickly, thus bringing uncertainty to the market. They say macro-economic adjustments, controls and negotiations between up-stream and down-stream sectors are necessary to stabilize the market.

Zhou Dadi said "China needs to enhance its industrial planning. This does not mean we are going back to a planned economy. This means a good market economy also needs planning. That's best for China."

Experts say the energy sector is one of the focuses of China's four trillion yuan investment plan. They suggest energy firms and energy-intensive industries seize this opportunity to adjust their production structures and renovate their business models.

 

Editor:Xiong Qu