Industry insiders say the central government is likely to make remarkable changes in China's coke exports system next year.

The possible move would meet the country's World Trade Organization (WTO) commitment to relax restrictions over coke exports, said a senior official from China Coal & Coke Holdings Ltd.

A bidding system is expected to be introduced among China's coke producers to gain coke export certificates, replacing the current government-controlled issuance of certificates.

Both the Ministry of Commerce and the National Development and Reform Commission are to be involved in the expected transformation, said the senior official from China Coal and Coke Holdings Ltd.

It is understood that the Ministry of Commerce is currently collecting feedback from the country's major coke producers over the proposed changes to coke exports.

But the two government bodies remained tightlipped Tuesday when asked about the possible changes.

Hu Zhihao, vice-president of China Coal and Coke Holdings Ltd, said China's coke demand will top 220 million tons this year, and the country will export 15 million tons of coke in 2005.

"The coke production capacity will continue growing rapidly to hit 350 million tons by 2006 from the projected 260 million tons this year, despite government measures to rein in overinvestment in many industrial sectors," Hu told the Coaltrans 2005 conference which ended yesterday in Beijing.

"Soaring demand from the international market will also drive the opening of China's coke exports," Hu added. "China's coke production cannot remain isolated from the overseas market."

Industry insiders say a clearer picture of the changes will be possible when the second batch of certificates for 2005 coke exports are issued by the government next month.

China this year authorized 48 coke companies to export 14 million tons of coke, down 1 million tons from the figure in 2004.

The changes in coke exports, if confirmed, will have an impact on the export market.

"If the market rumours are confirmed by the government, the country's coke exports for the fourth quarter of the year will see some shocking shake-ups," Hu said yesterday at the Coaltrans conference.

The changes will have some impact on the price of coke exports, and lead to increased coke exports from China next year, said industry experts.

Analysts predict the government will also take additional measures to pinch the export spree, if the changes are to take place next year.

Some insiders also argue there are still difficulties for the government to implement the changes next year, although that reflects the trend of export reforms.

"The authorized companies for coke exports will be reluctant to see the changes, which will bring a growing number of competitors to the export market," said Han Yong, an industry analyst in coal with Shanghai-based China Securities.

"Most of these companies who have obtained the export certificates have a big say in lobbying the government to make decisions," Han added.

(China Daily April 13, 2005)