The latest research by Fitch Solutions Macro Research has brought to light an intriguing shift in the global coal market landscape. The report predicts that India, currently a significant player in the coking coal sector, will surpass China to become the world’s largest importer of coking coal by around 2025. This shift is expected due to projected growth in Indian coking coal consumption spurred primarily by an expansion in steel production. Simultaneously, China’s steel production might see a downward trend resulting from the slowdown in its economy and construction sectors.
Coking Coal: An Unavoidable Ingredient for Steel Production
Also known as metallurgical coal, coking coal is used to make coke – an essential raw material in steel production. Coke serves two critical roles in the process: acting as a fuel and functioning as a reducing agent in smelting iron ore in a blast furnace, thereby transforming iron oxide (hematite) into metallic iron.
The Intricate Process of Coking
For the uninitiated, the creation of coke involves heating coal in the absence of air, which causes the volatile components to be driven off. This process of heating is commonly known as carbonization or coke making. Interestingly, the chemical composition alone cannot determine whether a coal is suitable for coking. Coking coals usually possess volatile matter contents ranging from 20% to 32%, placing them in the low- and medium-volatile bituminous rank.
The Varieties of Coal
The world hosts a staggering variety of coal, classified as per their grade and composition. These range from lignite, also known as brown coal, which is considered the lowest rank of coal, to anthracite, the highest quality and most desirable form of coal.
Coking Coal Consumption: India vs. China
| Country | Coking Coal Consumption (2019) | Predicted Consumption (2028) | Average Annual Growth Rate |
|---|---|---|---|
| India | [Insert Value] | [Insert Value] | 5.4% |
| China | [Insert Value] | [Insert Value] | [Insert Value] |
Global Influence: A Shift in Power
At present, China holds a great deal of sway over the global coking coal market. It accounts for approximately two-thirds of the global production and consumption of coking coal. However, with the predicted contraction in China’s steel production and the simultaneous expansion in India, it’s not unlikely that control over the global coking coal prices may shift from China to India in the near future.