The Chinese government is considering the levy of an extra tax on the country's coke exports, which account for half of the world's annual coke consumption.

Sources with the National Development and Reform Commission (NDRC) and the General Administration of Customs said the levy would protect the country's diminishing coke resources and the tax ratio was yet to be fixed.

Coke is in short supply globally and it is estimated that China's coke resources will be depleted in 40 years.

The NDRC was studying the feasibility of cutting exports by an extra levy, said Hou Shiguo, an NDRC official.

Coke is a crucial raw material for the steel-making industry. Every year steel works around the world consume 427 million tons of coke.

The energy-consuming coking industry had attracted government attention as it strives to cut power consumption and tighter control of exports was expected to help reduce the country's soaring trade surplus, said Zhang Bingzheng, an official with China Customs.

The government has levied a five-percent tax on coke exports since Nov. 1, last year, but it proved ineffective in suppressing rising exports, which rose by 38 percent in January.

The average price of China's exported coke was US$150.3 per ton in January, while the average cost in the global market stood at US$171.

The United States and the European Union both launched anti-dumping probes into imports of foundry coke from China last year.

"Among the three measures of export control, the extra levy is easier to operate compared with raising the standards of exported products and cutting export quotas," said Zhang.

Insiders estimate coke exports this year could be reduced to around 10 million tons with a 20-percent tax and seven million tons with a fifty-percent tax.

Affected by the extra levy, the country's iron and steel industry, which consumes 80 percent of the coke, would possibly see an extra levy on its exports, said an insider.

China's coking industry should reduce production in view of the situation, said Huang Jingan, president of the China Coking Industry Association, adding prices could possibly fall in the future.

(Xinhua News Agency March 24, 2007)