Last year, Mongolia outstripped all the other coking coal suppliers to the Chinese market, including Russia which accounted for 26% of China’s imports of raw materials of this type. In turn, in global coking coal exports Mongolia is the third (14%), behind only Australia (44%) and Russia (15%, according to the International Energy Agency). The largest coking coal importer on the world market was China, which accounted for 54% of global imports last year, with India (25%) and Japan (20%) being the second and the third.
The dynamics of coking coal exports from Mongolia, Russia, Australia and other supplying countries in the coming years will depend on the rate of spread of low-carbon technologies in metallurgy. We mean the so-called arc steelmaking plants which utilize the thermal effect of the electric arc, well known from the example of a microwave furnace. While the most common oxygen-converter plants in metallurgy use iron ore and coking coal as raw materials, arc steelmaking furnaces use scrap metal for this purpose. According to Global Energy Monitor, by April 2024 arc furnaces accounted for only one-third of the global capacity of the operating steelmaking plants, whereas in the segment of facilities under construction – already over 40%.
Urbanization in India will also be an important driver of coking coal demand: while the PRC had 65% of the urban population in 2023, India had 36%. Narrowing this gap will generate an additional demand for steel products in the automotive, rail transportation and construction sectors. This, in turn, will entail the demand for coking coal from the Indian steel industry, where 70% of the operating capacity is accounted for by oxygen converter plants requiring an average of 770 kg of coking coal to produce one ton of steel. As the S&P Global Platts forecasts, coking coal consumption in India is estimated to exceed 100 million tons by late 2024 (about 9% of global demand).
