Global Steel Demand Soars Thanks to Coal

The demand for coking coal, a crucial ingredient in steel production, remains robust as global steel demand recovers post-pandemic, despite the waning interest in the energy coal sector among major investors.

#India, with its rapidly growing economy, is expected to play a leading role in driving the demand for coking coal. Australia, as the dominant supplier of this critical material, is poised to benefit from strong export earnings in the coming years.

Wood Mackenzie Power & Renewables , a respected resource consultancy, projects a global steel output increase from 1.8 billion tonnes in 2022 to 2.2 billion tonnes by 2050. The demand for coking coal is expected to rise even more sharply, with AME Research forecasting a 68% increase in global export demand, from 327 million tonnes in 2022 to 548 million tonnes in 2040.

The World Steel Association (worldsteel) highlights the integral role of metallurgical #coal in steel production. For instance, every electric vehicle requires 900 kilograms of steel, which necessitates 690 kilograms of metallurgical coal. Similarly, an average wind turbine requires 285 tonnes of steel and 220 tonnes of metallurgical coal.

The Projections

India is expected to account for 228 million tonnes of coking coal demand in 2040, representing a 226% increase from the 2022 demand levels of 70 million tonnes.

Wood Mackenzie anticipates a 2.9% growth in global steel production in 2023, following a 3.7% decline in output due to pandemic-related lockdowns in China and raw material shortages caused by the conflict in #Ukraine.

While electric arc furnaces that use scrap are gaining popularity, blast furnaces are still projected to account for over half of steel production by 2050. This underscores the continued demand for high-quality metallurgical coal.

Australian metallurgical coal producers faced disruptions in 2022 due to wet #weather conditions. However, they also reaped the benefits of record prices, with premium hard coking coal briefly surpassing $US600 per tonne in March 2022.

The Future of Coal

Douglas Thompson, the CEO of Coronado Global Resources, an ASX-listed pure-play metallurgical coal producer, remains optimistic about the future demand for metallurgical coal. Thompson emphasises that unless a substitute for #steel emerges, which is not currently foreseen, there will be a significant undersupply of metallurgical coal, leading to positive #pricing trends in the mid-to-long term.

Coronado, with mines located in Australia and North America, focuses on supplying higher-quality metallurgical coals, particularly as steel manufacturers aim to reduce emissions.

Metallurgical coal holds a cornerstone position in the energy transition and the drive to reduce global emissions. Electric vehicles, wind turbines, and other renewable energy infrastructure heavily rely on steel, which in turn depends on metallurgical coal for its production.

Coronado's Commitment

Coronado Global Resources Inc. is committed to sustainable mining practices, aiming to reduce its greenhouse gas emissions by a third by 2030. The company has implemented projects such as the ventilation air methane regenerative thermal oxidation unit and the gas pilot project to lower its carbon footprint.

With buoyant demand from steel makers and a commitment to sustainability, Coronado anticipates numerous growth opportunities, both organically and potentially through acquisitions, as customers seek a reliable supply of their sought-after coal.

Accurpress Australia recognises the critical role of metallurgical coal in the steel manufacturing process. With a focus on sustainable mining practices and a commitment to reducing greenhouse gas emissions, Accurpress strives to contribute to a greener future. By offering advanced press brake solutions that enhance productivity and efficiency, Accurpress Australia supports the steel industry's sustainability goals.

With buoyant demand from steel makers and a commitment to sustainability, Accurpress Australia anticipates numerous growth opportunities, both organically and potentially through acquisitions, as customers seek a reliable supply of their sought-after coal.

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