July 17, 2000
News Release 00-095
Inv. No. 332-407
U.S. AND CHINESE FOUNDRY COKE PRODUCERS ARE WORLD'S LARGEST
PRODUCERS AND TRADERS, SAYS ITC
The U.S. and Chinese are the world's largest foundry coke producers and traders, reports the
U.S. International Trade Commission (ITC) in its publication Foundry Coke: A Review of the
Industries in the United States and China.
The ITC, an independent, nonpartisan, factfinding federal agency, prepared the report at the
request of the Committee on Ways and Means, U.S. House of Representatives.
As requested, the ITC provided market information concerning the foundry coke industries in
the United States and China for 1995 through 1999. The information covered production,
consumption, and trade trends; prices; significant developments in foundry coke market
practices; market factors affecting the availability of foundry coke and purchasing decisions by
coke-consuming industries; costs related to compliance with environmental laws and policies;
costs of transportation to U.S. markets for Chinese and domestic foundry coke; and other
significant factors identified during the investigation. Highlights of the report follow.
- Foundry coke, a subgroup of metallurgical coke, is the carbonized product remaining
after the destructive distillation of certain types of coals. Foundry coke is used primarily
in the production of cast iron in cupola furnaces both as a fuel and as a source of carbon
for the melted product.
- The U.S. and Chinese foundry coke industries, two of the largest such industries in the
world, produced 1.25 million metric tons (1999) and an estimated 2.6 to 2.7 million
metric tons (1997), respectively. The U.S. foundry coke industry is by far the older of
the two industries, with roots dating back to the early 1900s; the Chinese industry did not
achieve significant production levels until the 1980s.
- Production costs in the two countries vary, ranging from about $36 to $55 per metric ton
in China for foundry coke to about $138 per metric ton in the United States in 1999.
Internal Chinese transportation and handling costs ranging from $25 to $37 per metric
ton for product intended for export could raise the cost to as much as $92 per metric ton
at the Chinese port. China has a significant per ton cost advantage in each of the major
components of production (i.e., coal and labor). Coal costs in China ranged from $12 to
$18 per metric ton of coal, while in the United States the cost was about $58 to $65 per
metric ton delivered. Labor costs associated with the production of foundry coke in
China are also lower than those in the United States, ranging from $2.65 to $10.65 per
metric ton in China to about $25.58 per metric ton in the United States.
- The United States has more comprehensive environmental regulations, more rigorous
enforcement, more sophisticated environmental protection technology and equipment in
place, and more stringent operating practices than China, resulting in significantly higher
levels of current capital and operating costs for environmental protection in the United
States. However, China reportedly is redrafting some of its environmental laws,
regulations, and institutions and developing new laws and policies designed to improve
the environmental performance of its industries.
- The U.S. coke industry produces a high quality coke to meet customer demand. The
U.S. industry does not produce the lower quality foundry coke that is imported from
China. Although all domestic consumers can use the high quality product for all
applications, some can also use a lower quality coke in certain applications, such as pipe
- Exports of Chinese foundry coke are substantial and amounted to at least 1.2 million
metric tons in 1997 with Japan, the EU, and the United States as China's largest export
markets. During 1997-99, U.S. imports from China increased from 23,000 metric tons
to 133,000 metric tons, according to questionnaire responses.
- The weighted average contract unit values (f.o.b.) for domestic foundry coke increased
steadily from $175.81 per metric ton in 1995 to $185.74 per metric ton in 1998, before
declining to $176.12 per metric ton in 1999. In comparison, weighted average unit
values for U.S. imports of foundry coke from China decreased from $123.48 per metric
ton in 1997 to $108.26 per metric ton in 1999.
The foregoing is from the ITC's report Foundry Coke: A Review of the Industries in the United
States and China (Inv. No. 332-407, USITC Publication 3323, July 2000). The report will be
posted on the ITC's Internet site at www.usitc.gov. A printed copy may be requested by calling
202-205-1809 or by writing the Office of the Secretary, U.S. International Trade Commission,
500 E Street SW, Washington, DC 20436. Requests may be faxed to 202-205-2104.
ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade
and are generally conducted at the request of the U.S. Trade Representative, the Senate
Committee on Finance, or the House Committee on Ways and Means. The resulting reports
convey the Commission's objective findings and independent analyses on the subjects
investigated. The Commission makes no recommendations on policy or other matters in its
general factfinding reports. Upon completion of each investigation, the ITC submits its findings
and analyses to the requester. General factfinding investigation reports are subsequently released
to the public, unless they are classified by the requester for national security reasons.