The photo is sourced from gmk.center
Oxygen-converter and steel arc furnaces are used for steel-making: the first method consists of blowing liquid iron with oxygen, while the second is based on the electric arc effect well-known on the microwave oven example. At the same time, while oxygen-converter plants use iron ore and coking coal as raw materials, arc furnaces use scrap metal for this purpose.
The oxygen-converter method still remains the most popular. However, it is characterised by a higher carbon intensity. According to the Global Energy Monitor, global capacity of the oxygen-converter plants reached 1,397 million tons per year by March 2023 , more than doubling a similar figure for steel arc furnaces (664 million tons per year), but in the segment of steelmaking capacity under construction, the difference was only 20% (94.1 million tons per year vs. 78.2 million tons per year).
Such dynamics is largely due to the growing interest in reducing greenhouse gas emissions in the steel sector, which remains one of the largest carbon dioxide emitters: according to McKinsey estimates, it accounts for 26% of global industrial CO2 emissions, while the cement industry accounts for 20%, and the oil – gas and chemical industries – 15% and 12% respectively (with 27% of all other industries).
However, oxygen-converter furnaces remain popular in developing countries: the global capacity of this type of plants under construction reached 94.1 million tons per year by March 2023, China and India separately accounted for 75.3 million tons per year (exactly 80%), according to the Global Energy Monitor. Therefore, these countries have the greatest potential for increase in coking coal imports.
In addition to the changing balance of steelmaking capacity, import dynamics will be strongly influenced by the ongoing urbanisation in India, where urban population share is still significantly lower than in the PRC (36% vs. 64%). Reducing this gap will provide additional demand for steel products in construction and transportation and, consequently, for coking coal for smelting raw materials.