China's growing coke exports may trigger an export tax hike in the future, according to a senior official with the China Coke Industry Association (CCIA), state-run media reported today.

China increased the export tax on coke from 15 percent to 25 percent in January this year and although January and February exports slowed, exports in May rebounded, which means a further export tax hike is possible, Huang Jingan, chairman of the CCIA, was quoted as saying in a China Securities Journal report today.

CCIA officials were unavailable for comment when reached by Interfax today.

China exported 1.66 million tons of coke in May, up 23.88 percent from the previous month and surging by 127.40 percent from February. China's coke exports were 960,000 tons in January and 760,000 tons in February.

Coke is an important raw material for steelmaking, one of China's core industries. In order to secure coke supplies for the domestic market, China first imposed a 5 percent export tax on coke on Nov. 1, 2006, and lifted it to 15 percent on June 1, 2007.

Exports in June and July last year pulled back on implementation of the raised export tax, but rebounded shortly after due to higher international prices, which led the Chinese government to raise the export tax to 25 percent.

Huang added that China's crude steel production will continue to see high growth levels this year, with output increasing by 40 million to 50 million tons, which will lift coke demand.

Aside from increasing iron ore prices, surging coke prices have plagued steel mills and squeezed profits. Major steel mills in China have their own coking plants or have established long-term strategic agreements with coke producers to secure supply for production.