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| Industry: |
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Coking Coal, or Coke as it is popularly known, is a vital raw material in the steel making process. The coke acts as a melting agent, converting raw materials like iron ore to produce steel in the blast furnace route, which is the preferred way of steel making in India. (One ton of steel roughly requires 0.6 tons of coke, which in turn, requires one ton of metallurgical coal).
However, India has very limited reserves of metallurgical coal, which account for only 17 % of the country’s proven coal reserves (257.4 billion tons). Even the available metallurgical coal is of inferior grade and is mainly used as a blender with imported coal.
India is therefore dependant on imported coal / coke, which is sourced primarily from Australia and China. China, for obvious reasons is slowly moving towards a controlled export regime and has started imposing export tax on coal, sending out clear signals about controlling the quantity of coal / coke to be exported. In Australia, because of logistical constraints, supply of coal for exports cannot be jacked up significantly in the short term. This has created a peculiar situation, where availability of quality hard coking coal for steel making in India has reached a critical stage.
With increasing demand and logistical constraints in the supplying nations, prices of metallurgical coke have been on a constant upward spiral. During 2008, per ton prices of hard coking coal zoomed beyond US$ 300 (up from US$ 98 in 2007 per ton). While prices have softened since then as a fallout of the global meltdown, they are still above historical levels and are all set to zoom again in the near future, based simply on the demand supply scenario.
While on the one hand Indian companies are venturing out to acquire coal assets abroad with the twin view of securing their long term supplies and creating a hedge against wild fluctuations in the commodity’s prices, not many have achieved success, considering the fact that the commodity is in short supply the world over and asset plays are hard to come by. |
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| Coal Criticality: |
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India is currently the 5th largest producer of steel. She is slated to become the second largest by the year 2016 and by the year 2020, her steel making capacities are expected to grow exponentially, taking her way beyond the 200 million ton mark. 193 MOU’s for Greenfield projects involving a total outlay of INR 5140 billion is already in place which is expected to be further bolstered once the global economy shrugs off the ill effects of the meltdown.
The per capita consumption of finished steel products in India has nearly doubled to 43.4 kgs in 2007 from 26.8 kgs in 2001, showing the kind of growth trajectory that the industry has chalked out in the immediate past. However, this is still woefully small in comparison to the world average of 194.2 kgs and virtually insignificant when compared to developed economies like USA (353.9 kgs) and Germany (463.4 kgs), pointing at the huge scope that remains in the segment.
Even if we take a conservative benchmark of 200 million tons of steel by the year 2020, and consider that only 50 percent of it will be made using the Blast Furnace route, then also will arise a coke demand of above 60 million tons per annum, which is a humungous jump from current consumption levels. Industry experts however, expect this demand to be upward of 150 MT basing their calculations on an realistic benchmark of 300 MT of steel production by the year 2020.
Another fact that needs elucidation is that while the primary driver of demand for coke is, and will continue to remain, the steel industry, there is also a thriving demand from segments like foundries, soda ash and other chemical units, etc. something that is not considered while compiling the demand for coal and coke.
The critical point then, is that coking coal and coke will continue to be in short supply in the foreseeable future and that there will be a huge opportunity in front of key players like Global Coke. |
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| Business Enquiries: |
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| Specification: |
| 1. |
Fixed Carbon |
By Difference |
| 2. |
Ash |
12.5% |
| 3. |
Sulphur |
0.6% |
| 4. |
Volatile Matter |
1.25% (max.) |
| 5. |
Chloride |
500 ppm (max.) |
| 6. |
Strength |
M-40 : 80% (min.)
M-10 : 8% (max.) |
| Note : Individual dimension (a,b & c) of each coke piece should be 90 mm (max) and 40 mm (min). sum of all three dimensions i.e., a+b+c=200 mm)max.) |
| 8. |
CRI |
21.0 to 23.0% |
| 9. |
Moisture |
5% (max.) |
| 10 |
CSR |
>64.1% and rejection below 63% |
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