Annual Report and Accounts 2010

As a product of coking coal, coke demand similarly follows the fortunes of the steel industry. However, coke markets tend to be more volatile since many steel mills produce their own coke supply with independent producers complementing their production. However, a number of producers continue to operate out of date coking batteries. There remains further volatility in the Central Eastern European region.

Subsequent to the collapse in steel production, coke demand in Central Europe fell significantly in 2009. In response much coke capacity in the merchant coke market was taken off line. This reduced supply capacity, along with export restrictions from China and rising demand, helped coke prices in Europe to recover in 2010 from the lows of 2009. Monthly European blast furnace coke prices rose in 2010 by an average of 90 per cent while monthly foundry coke prices rose by an average of 35 per cent.

Sales of our blast furnace coke are concentrated within a small number of large customers in the steel industry who in turn supply the automotive, construction and manufacturing sectors. Customers include blue chip organisations such as voestalpine and Moravia Steel with whom we have forged close, long-standing relationships.

Sales of foundry coke are more widely distributed over a larger number of smaller customers with their own foundries. Foundries mainly supply the automotive industry.