CONFERENCE REPORT: EUROCOKE 2018
metal production will increase in 2018 due to increased capacity utilisation. Similarly with coke: utilisation was weak pre-crisis, but will recover this year. The combat zone Most of Ukraine’s coal is produced in the conflict zone where mines have been abandoned and taken over by separatists, causing production to fall 60%. She said that Metinvest couldn’t get sufficient coal to operate its coke plants at reasonable rates. Infrastructure issues restrict the import of coal and transportation. An estimated 68% of Ukrainian coke making capacity is in Donetsk. It all adds up to one thing: increased consumption of imported coking coal, rising from 11.1Mt in 2018 to 12Mt by 2022. Coke plants in central Ukraine are steadily returning to full capacity, however, which should mean a year-on-year increase in production. Poland is split 55% BOF and 45% EAF and CRU believes that steel production will continue to grow, but at a slower rate than in the past five years. Strong steel demand in 2017 has lifted utilisation and the country’s coke capacity is operating at maximum rates (90% in 2016, 92% in 2017). In Turkey, steel production added 13% year-on-year in 2017 and will continue to grow, adding 3Mt going forward. According to CRU BOF production will lose market share to EAF steelmaking due to the availability of scrap and cheaper electricity. However, with old coke batteries at Erdemir and Isdemir in need of replacement, Turkey relied upon imports in the short to medium term (in descending order) from Australia, Columbia, USA, China, Russia, Canada, Mozambique, Italy, Ukraine and ‘others’. In 2017 Turkish coke imports increased almost four times. In terms of cost competitiveness versus benchmark coke production, China was relatively advantaged versus European coke producers between 2006 and 2013, according to CRU. From 2013 onwards, Europe took the lead as costs rose faster in China than in Ukraine and costs in Poland and Turkey were not rising as fast as they were in China and Germany. Lost capacity in Ukraine According to Melkonyan, Ukraine won’t become a coke exporter over the next five years as it has lost capacity that it www.steeltimesint.com
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The Russian coal industry Alexander Ignatov of ICG Consulting Inc gave an interesting presentation on the Russian coal industry starting with what he called the ‘restless 2000s’ when there
When steelmakers owned coal mines According to Ignatov, there was a time – during the pre-crisis period – when leading steelmakers, such as Severstal and Evraz, owned the big coking coal mines and bought most of the coal themselves, exporting around 18%. By 2017, half of the coal produced was exported with a shift in destination away from the European Union, following political sanctions in 2014, towards the Asia Pacific region. An estimated 15% of Russian exports are heading for the Asia Pacific region, which is still behind Australia and Indonesia, but nevertheless ‘sharp growth’ when compared with just 3% in the 2008/09 period. While competing with Australia and Indonesia, Russia must also watch the ‘new kids on the block’, namely Kazakhstan,
was a growth in surface mining versus underground operations, a decline in lignite production, a loss of low-cost advantages and continuing business concentration – and also a move to Soviet era production volumes. During the period 2000 to 2008, salaries grew faster than labour productivity and coal production. Partially, it was compensated by the fast growth of coal prices, but whichever way you looked at it, coalmining in Russia was becoming costly, eliminating any low-cost advantages when compared with the West. This year (2018) Russia celebrates 30 years since it achieved a coalmining record (in 1988) of extracting 425Mt. By 1998 that figure had dropped to 232Mt, but privatisation proved to be the ‘magic wand’ and coal growth was reinstated. By 2017, Russia was producing 96% of its earlier USSR record level and it is expected that it will exceed that level this year.
Mongolia, Vietnam and Columbia. Kazakhstan and Mongolia have good rail links to China. Exports will grow faster than domestic supply and the export rate may reach 50% this year (2018). Russian steel mills in the Kemerovo region of the country are the most easterly facilities. Most greenfield projects are located in Southern and Eastern Siberia and they are all targeting the Asia-Pacific region (APAC), not the Russian domestic market. He highlighted five new projects that have been started: Elga in the Southern Yakutian coal basin (Russia’s ‘far east’); Elegesta, Mezhegeiskoye and Kaa-Khem, all in the Ulug-Khem coal basin in Southern Siberia. Ignatov believes that Russian coalmining could go one of two strategic ways: support growing domestic demand or develop a healthy export market with the APAC region. �
won’t restart. However, coke production in Ukraine will rise due to higher capacity utilisation rates and the country will become self-sufficient in coke. Poland will experience modest growth in steel manufacturing, which will limit an increase in coke production, but a high capacity utilisation rate will help producers remain profitable. In Turkey, rising production will mean more coke in the medium term, although there will be a continual shift towards electric steelmaking, which will mean lower demand for coke.
July/August 2018
09/07/2018 10:42:29