What is Coking Coal And Where Do I Use It?
- Coal is a fossil fuel and is the altered remains of prehistoric vegetation that originally accumulated in swamps and peat bogs.
- The quality of each coal deposit is determined by: varying types of vegetation from which the coal originated; depths of burial; temperatures and pressures at those depths; and length of time the coal has been forming in the deposit.
- One of the highest grades of coal is metallurgical coal or coking coal. It forms one of the key inputs required for the production of steel (mainly used in iron and steel making industries).
- 70% of the steel produced today uses coal. In 2010, world crude steel production was 1.4 billion tonnes, requiring 721 million tonnes of coking coal. The most commonly applied process for steel-making is the integrated steel-making process via the Blast Furnace – Basic Oxygen Furnace. Around 0.6 tonnes (600 kg) of coke produces 1 tonne (1000 kg) of steel, which means that around 770 kg of coal are used to produce 1 tonne of steel through this production route.
- Steel is one of the most efficient modern construction materials. It offers the highest strength-to-weight ratio of any commonly-used material and is exceptionally durable. It is an essential material used in the construction sector, used to build high-rise buildings, bridges and tunnels as well as in the transport sector, to build railroads, trains, aeroplanes, ships and car bodies
Where is Coking Coal Produced?
- Coal is abundant, affordable and geographically well-distributed. Major developed and developing economies are able to utilise large indigenous coal reserves, while coal is also available from a wide variety of sources in a well-supplied worldwide market.
- The top four largest coking coal producers were: China (54%), Australia (15%), USA (7%) and Russia (7%).
- In the same year, China (77 Mt), Japan (54 Mt), India (38 Mt) and South Korea (31 Mt) were the largest consumers driven by rapid urbanization and industrialization.
- According to the International Energy Agency, world coking production grew from 783478 thousand tonnes in 2009 to 1003458 thousand tonnes in 2013.
How much does it cost
- Coking coal is not a homogenous product. It varies in quality with hard coking coal representing the highest grade which attracts a premium price. Semi-soft or high-volatile coking coal is of a lower quality and as such sold at a discount.
- In addition freight, insurance and whether the price refers to contracted coal or spot price are important factors in considering the price of coal.
- Currently coking coal prices are high and determined mainly by demand in Asia and Europe and supply shortages from main suppliers.
Specific Issues for Coking Coal
- Australia and China are the overwhelming suppliers of coking coal. As noted in the ‘Critical Raw Materials for the EU’ report this concentration of supply creates risk, for instance in 2011 Australian coking coal supply was disrupted by flooding.
- Similarly coking coal has a high economic importance due to its use in the steel sector with few options for substitution available.
- It is important to note that Coking Coal is considered a borderline case. Although it narrowly misses the economic importance threshold, for the sake of caution, coking coal is kept on the list of critical raw materials for the EU and thus included in the table. However, it will be phased out from the next list should it fail to meet the criteria in full.
- Securing reliable, sustainable and undistorted access to coking coal is essential to sustaining the EU’s economy, growth and jobs.
- Coking coal faces political, technical and financial challenges as the world attempts to transition to a lower carbon economy. To reconcile the role of coking coal EU and member states must increase investment and develop policy consistent with encouraging support for carbon capture and storage technology.