Coking coal: Rethinking fuel strategy

The recent global geo-political dynamics as well as sharp revival in the steel sector demand post pandemic-induced lockdown have put focus on coking coal, a key input for the steel sector.

- Tamajit Pain & Sumit Maitra

Coking coal prices are at a four-year low level mainly due to restrictions on Chinese steelmakers from buying Australian coking coal thereby causing a supply glut.

Imported coking coal prices have declined by as much as 35 percent during the year helping steel makers reap profits and analysts are of the view that benefits of lower coking coal prices is likely to continue during the third quarter as well.

But that hasn’t stopped domestic steel makers secure their supply sources in a better way.

Looking at alternatives to coking coal like gas-based processes for steel making, increasingly resorting to Pulverized Coal Injection process and also raising the injection rates thereby improving cost, CO2 emission and energy intensity are some of the options being explored while new-age technologies to convert non-coking coal to coke through rapid heating are also being considered.

India depends heavily on imports from a select number of countries such as Australia, US and Canada. Availability of quality grades, erratic price movements from domestic suppliers, etc. are the primary reasons for the high import bill. Taking note of this challenge and to reduce pricing and concentration risks, the Government of India is taking relevant measures to reduce imports, keep a tab on domestic prices and explore alternative overseas sources for coking coal.

Most of the major steel plants are returning to pre-Covid levels of capacity utilization with steel demand recovering to levels of 44.75 million tons (mt) in the April-October period.

In November, finished steel consumption was at 8.623 mt, 11 percent more than November of 2019. On a month on month basis also, finished steel consumption in November registered a growth of 0.23 percent over October.