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 manufacture.

• 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.