COKING COAL

What is Coking Coal And Where Do I Use It?

Coking coal (or metallurgical coal) is a bituminous coal with a suitable quality that allows the production of metallurgical coke, or simply named coke. Coke is the main product of the high-temperature carbonisation of coking coal. It is an essential input material in steelmaking as it is used to produce pig iron in blast furnaces acting as the reducing agent of iron ore and as the support of the furnace charge.

Steel is cited as a strategic material in all industries related to the low-carbon transition. About 780 kg of coking coal is needed to produce 1 ton of steel.

WSA data shows that the share of oxygen steelmaking (BF-BOF) in global crude steel production was over 71% in 2022, with the rest being accounted for by the electric route (predominantly EAFs and also IFs).

Global coking coal demand reached around 819 million tonnes in 2023 from roughly 800 million tonnes in 2022. Data reveals that global coking coal demand has grown nearly 7% since 2018.

By-products of coke production such as tar, benzole, ammonia sulphate and sulphur are used for the manufacture of chemicals, as well as coke oven gas used for heat and power generation.

Where is Coking Coal Produced?

Global metallurgical coal production in 2022 was 1,096 million tons.

The largest producers of coking coal were China (676 million tons in 2022- 62%), Australia (169 million tons in 2022- 15%), Russia ( 96 million tons in 2022- 9%), USA ( 55 million tons- 5%) and Canada ( 34 million tons- 3%).

The structural deficit of coking coal in the EU market was mainly met by imports from Australia, the US, Canada and Russia, and in recent years from Mozambique and Colombia.

Since August 2022, coal imports from Russia have been halted as a result of the embargo imposed on Russia following its armed invasion of Ukraine, which increases demand for overseas coal.

In 2022, a total of about 14 million tons of coking coal was mined in the European Union, of which the CRM Alliance's member JSW (Poland) mined about 11 million tons. In addition to JSW, coking coal is mined in PGG SA and OKD (Czech Republic).

About 39 Mt of coking coal were annually imported during 2016-2020, only in 2021 imports reached 28,7 Mt, which represented two-thirds of the total EU sourcing (Global Market; European Commission).

Coking coal trade reflects the demand for iron ore, pig iron and crude steel (EC, 2020). There has been a substantial increase in coking coal consumption during the last 40 years, driven primarily by growing steel production in China as infrastructure has been expanded (IEA 2021).

How much does it cost

Coal spot prices can fluctuate based on short-term market conditions, but contract prices tend to be more stable (IEA, 2021).

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.

Alternative clean steel production technologies are currently being developed. However, at this point, volumes of produced green steel are insignificant as compared to EU demand. Moreover, by-products of coking coal production such as coal tar are considered a valuable and irreplaceable material used in multiple strategic value chains e.g. electrodes, batteries.

Conclusions

Coking coal has been considered a Critical Raw Material continuously since 2014.
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 low 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.

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