China will cut its output of coke, a key ingredient in the production of steel, by 20 percent next year to bridle polluting industries, according to Ministry of Commerce sources.

Insiders say the move will impose intense pressure on the domestic coke market that is already overheated this year, and will also impact local iron and steel companies.

At the end of May, China agreed to maintain last year's export level of 4.5 million tons of coke to the European Union this year.

European steel manufacturers have a pressing need for coke from China, as a worldwide shortage of the resource has driven up its price.

China produced 178 million tons of coke in 2003, accounting for half of the world's total supply. Of its 14.7 million tons of coke export last year, one third went to EU.

(Xinhua News Agency August 14, 2004)