Solid fossil fuels, such as bituminous and lignite coals, oil shale and peat, account for 90% of all fossil fuels. The processing of solid fossil fuels makes it possible to convert them into refined solid fuels and carbonaceous reducing agents, to obtain high-calorific combustible gases from coal, mixtures of organic substances used as a variety of chemical raw materials.
Thermal processing of fossil fuels without access to air at a temperature of 500-1100 ° C became the most popular process. There are three types of coking depending on the final heating temperatures: low-temperature coking or semi-coking (500-600 °C), medium-temperature coking (650-750 °C) and high-temperature coking (950-1100 °C).
Volatile coals are mainly used for semi-coking because they give a high yield of primary tar. Semi-coke is the main product of the low-temperature pyrolysis process, a solid residue that amounts up to 90% of the coal mass.
According to World Coal analysts, the global market for metallurgical coke and semi-coke was estimated at USD 186 billion by the end of 2018, and it will reach USD 241.1 billion by the end of 2027.
The growing construction industry will have a positive impact on the global metallurgical coke market. The construction industry is the largest consumer of steel, and any growth in the construction industry will drive the demand for steel. Increased demand for steel from various industries will stimulate the growth of steel production, which in turn will stimulate the growth of the metallurgical coke market.
Developing countries such as India and ASEAN countries are expected to create significant opportunities for the metallurgical coke market by stepping up government initiatives to develop domestic manufacturing industries. In addition, recovery in economic growth and increased industrial and institutional investment in Latin American countries such as Argentina, Brazil and Mexico will create an optimistic outlook for the metallurgical coke market.
The main producing countries of coking coal and its products are Australia, Russia, USA, Indonesia, Canada, India, Poland, and Germany.
The main consumers of semi-coke are metallurgical plants. MarketWatch estimates that independent companies produce less than 2 million tons of coke and semi-coke per year.
Table 1. Top-15 exporting countries of metallurgical coke and semi-coke in 2020
|Country||Export, thousands USD||Export, tons|
|World||5 269 762||26 034 017|
|1||Poland||1 406 799||6 351 977|
|2||China||772 940||3 489 288|
|3||Japan||656 246||2 961 794|
|4||Columbia||623 161||3 355 472|
|5||Russia||487 977||2 688 494|
|6||Germany||248 403||851 446|
|7||USA||179 036||620 206|
|8||Czech Republic||146 580||540 899|
|9||Italy||95 537||340 640|
|10||Bosnia and Herzegowina||92 369||369 321|
|11||Netherlands||81 925||392 333|
|12||Indonesia||69 585||397 170|
|13||Hungary||57 238||224 735|
|14||Belgium||47 983||214 799|
|15||Zimbabwe||37 590||199 258|
*Source: International Trade Map
Table 2. Top-15 importing countries of metallurgical coke and semi-coke in 2020
|Country||Import, thousands USD||Import, tons|
|World||5 843 344||25 206 737|
|1||China||690 956||2 979 745|
|2||India||625 036||2 568 288|
|3||Germany||375 477||1 582 977|
|4||Brazil||341 986||1 357 642|
|5||Malaysia||285 361||1 190 798|
|6||The Great Britain||261 028||1 140 977|
|7||Spain||251 700||887 551|
|8||Kazakhstan||218 567||992 662|
|9||Vietnam||207 433||902 577|
|10||Indonesia||187 329||941 227|
|11||Romania||173 199||664 776|
|12||Canada||163 892||1 243 114|
|13||Turkey||148 801||673 597|
|14||France||136 278||457 167|
|15||Japan||134 420||387 675|
* Source: International Trade Map
Price dynamics and forecast
The main raw material for coke and semi-coke production is coking coal.
Coking coal prices rose in early 2020 amid strong demand from China, where production and logistics were limited in the domestic market due to the COVID-19, Mongolia’s decision to close its border with China disrupted supply chains forcing Chinese buyers to turn to the maritime market in order to fill the deficit.
However, prices for coking coal fell sharply in April. In May-June, they kept below $ 110 per ton for premium and below $ 90 per ton for solid coking coal, after that the prices began to recover, however, not supported by the market, they returned to their minimum values.
Meanwhile, in September the coking coal prices rose sharply, adding almost 25% since the beginning of the month. Quotes for Australian premium “hard” material exceeded the level of $ 134 per ton, which was the highest level since the beginning of April.
In October-November, the participants again focused on China. The Chinese authorities have ordered to stop purchases of at least seven commodity categories, including coal, from Australia starting from 6 November. So, without access to Australian coal, Chinese steel plants were forced to turn to alternative exporters – Canada, USA, Mongolia, and Russia. As a result, China CFR marine coking coal prices have risen, while Australian FOB coal prices have declined.
The last quarter of 2020 was volatile for Australian coking coal (HCC) prices. At the beginning of the quarter, the base price rose sharply to $ 140 per ton, and then fell by 30% to $ 98 per ton in November. If the drop in prices in early 2020 was caused by the steel industry slowing due to the COVID-19, the November price drop came at a time when the industry was actively recovering. The fall in prices reflected significant uncertainty as traders in China reported that Australian coal exports could be subject to unofficial import restrictions. This was followed by an official ban. At the same time, domestic prices in China moved in the opposite direction. Chinese companies switched to purchasing high quality coking coal from Canada and the USA, Mongolia and Russia.
The recovery in coking coal prices in Australia will largely depend on China’s policies. Coking coal prices are expected to continue recovery in 2021, along with global steel production.
Semi-coke market in the CIS countries
Russia is a key producer of coke-chemical products in the CIS region. The main producers are large metallurgical enterprises that produce coke and semi-coke mainly for their own needs, and send them to domestic and foreign markets only in the case of the surplus products. The main importers of Russian-made products are Kazakhstan and the countries of Western Europe. The capacity of the semi-coke market is estimated at 5 million tons within the CIS.
Table 3. Exporting countries of metallurgical coke and semi-coke in the CIS in 2020
|Countries||Export, thousands USD||Export, tons|
|CIS||490 343||2 698 622|
|1||Russia||487 977||2 688 494|
|2||Kazakhstan||2 329||9 928|
*Source: International Trade Map
Table 4. Importing countries of metallurgical coke and semi-coke in the CIS in 2020
|Countries||Import, thousands USD||Import, tons|
|CIS||286 613||1 239 541|
|1||Kazakhstan||218 567||992 662|
|2||Russia||25 672||78 230|
|3||Georgia||18 478||80 112|
|4||Uzbekistan||11 425||45 263|
|5||Belarus||9 998||35 631|
|6||Tajikistan||1 340||4 456|
|7||Azerbaijan||1 116||3 127|
* Source: International Trade Map
Russian producers of coke and semi-coke are: Altai-Koks OJSC, Koks PJSC, Gubakhinsky Koks OJSC, Evraz ZSMK KHP, Koks OJSC (Metholding), Mechel Koks LLC, Moskoks AO, PJSC Severstal (Cherepovets Metallurgical Plant), PJSC Magnitogorsk Metallurgical Plant (MMK Koks).
Export of coal and coke, 8 months of 2020
At the end of 8 months of 2020, about 121 million tons of coal were exported from Russia. This is 9.9% less than was exported during January-August 2019. The customs value of export coal amounted to $ 7.8 billion, which is 28.8% less than in 8 months of 2019.
For 8 months of 2020, coal import amounted to 14 million tons – 0.8% less than a year earlier. In value terms, import of coal amounted to $ 196.8 million (minus 22.2% to the level of 8 months of 2019).
According to the Federal Customs Service, more than 1.5 million tons of coke and semi-coke were exported during 8 months of 2020, which is 20.1% less than a year earlier. The customs value of exported coke and semi-coke in January-August 2020 decreased by 41.3% and amounted to $ 268.5 million.
Russian export of coal in August 2020 amounted to 16.1 million tons (minus 11.2% versus August 2019 and plus 7.1% versus July 2020). According to the Federal Customs Service, the customs value of exported coal amounted to $ 941.9 million (minus 31.2% versus August 2019 and minus 0.8% versus July 2020).
Export of coke and semi-coke in August 2020 amounted to 190.5 thousand tons (plus 9.1% versus August 2019 and minus 32.1% versus July 2020). The customs value of coke and semi-coke exported in August 2020 amounted to $ 33.7 million (minus 16.4% versus August 2019 and minus 28.8% versus July 2020).
The production of coke and refined products in January-September 2020 in value terms amounted to 607.8 billion tenge – 1.7% less compared to January-September 2019 (IPP – 99.1%). In general, in 2019, production volume reached 839.7 billion tenge, which is 6.9% less than in 2018 (while the industrial production index showing real growth was 105.7%).
The largest volume of production in the sector is accounted for the regions with the refineries: Atyrau region (274.6 billion tenge), Shymkent (115.2 billion tenge) and Pavlodar region (90.2 billion tenge). In other regions, the volume of production varies from 33.5 million tenge (East Kazakhstan region) to 29.2 billion tenge (Aktobe region).
In physical terms, among the main types of products in the sector, the most noticeable growth was noted in the production of coke and semi-coke from coal, lignite or peat: by 63.2%, to 3.2 million tons. The output of petroleum coke, bitumen and residues from oil refining (by 6.6%, to 1.3 million tons) and hydrocarbon-liquefied gases (by 3.3%, to 890.8 thousand tons) are also positive. At the same time, the production of fuel oil, gas oil and petroleum distillates decreased by 12.2% to 9.2 million tons. The production of kerosene (-35.8%) and heating oil (-27.1%) went into the red. The production of diesel fuel also decreased (-6.5%).
Pursuant to the coke and semi-coke market analysis, it can be concluded that there is a shortage of these products in Kazakhstan. Kazakhstan is a net importer of coke products, despite the fact that the country has its own production facilities, but the number of metallurgical enterprises is large enough to meet their needs. Currently all advanced industrial countries, using modern technologies, have switched to deep processing of simple coal to obtain products with higher added value. Kazakhstan has great potential for the development in this direction.