Coking coal producer and logistics provider, SunCoke Energy plans to produce around 3.40mn mt (3.75mn tons) of coke in 2020.  

The American coke producer also reduced its 2020 EBITDA guidance by $40-50mn to $190-200mn, citing the impact of short-term payment relief measures SunCoke extended to customers due to the COVID-19 pandemic.

 

Mike Rippey, president and chief executive officer, SunCoke Energy, said that the firm had decided to give “near-term coke supply relief in exchange for extending existing contracts,” to its customers owing to the weakness in demand and a fall in capacity utilization rates of steel producers during the pandemic.  

 

He added that while this measure would affect the company’s EBITDA in the short-term, it “assured long-term stability” for its key stakeholders.Moreover, the company has undertaken cost saving measures that are expected to result in savings of around $10mn by 2021. In a bid to diversify its customer base and balance the “current blast furnace coke market dynamics,” Rippey said that the company was planning to produce and sell foundry coke starting next year. 

 

In the second quarter, SunCoke’s domestic coke sales fell by almost 6pc to 886,319mt from 934,400mt in Q2 2019, while its revenue declined by $54.5mn to $323.5mn from $378mn during the same three months under comparison. 

 

The volumes handled by SunCoke’s logistics segment in Q2 2020, also halved to 2.58mn mt from 5.07mn mt in April-June 2019. Revenue from its logistics business, which comprises handling and mixing services, fell by $12.2mn to $7.3mn from $19.5mn during the same period under comparison.

 

The company’s consolidated revenue fell by $69.5mn to $338mn in April-June 2020 from $407.5mn during the same period last year. Its EBITDA also declined by $4.1mn to $59mn from $63.1mn during the same period.

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