Metallurgical Coal Market – Introduction
Besides generating electricity, metallurgical coal is witnessing a rapid adoption for the production of steel across various cities of the world. Metallurgical coal is the key ingredient in the production of steel from blast furnace and nearly 800 kg of this coal is consumed to produce steel worth one ton. Demand for steel has been growing in parallel to the urbanization for the production of automotive, electronic devices, and construction products, which is anticipated to fortify the demand for metallurgical coal market.
Another crucial by-product obtained by heating the metallurgical coal in coke ovens is coal tar. Demand for coal tar produced by metallurgical coal is ascending from the healthcare industry, in order to treat various skin conditions, on account of its anti-parasitic, anti-itching, anti-inflammatory, and antifungal properties. Utilization of coal tar as a generic medication and its over the counter availability is one of the strong growth drivers for the metallurgical coal market.
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Metallurgical Coal Market – Novel Developments
Anglo American, Arch Coal, BHP, Corondo Global Resources Inc., Teck Resources, Alpha Natural Gas, Ram River Coal Corp., West Cumbria Mining, New Colombia Resources, Contura Energy Inc., Alpha Natural Resources, Peabody Energy Corp., Murray Energy Corp., Alliance Resource Partners LP, Blackjewel LLC, NACCO Industries, Inc., CONSOL Energy Inc., Global Mining Group LLC, Blackhawk Mining LLC, and Warrior Met Coal Intermediate Holdco LLC, among others are some of the leading players transforming the landscape of the metallurgical coal market. Below are some of the notable developments in the metallurgical coal market.
- Contura Energy Inc. and Alpha Natural Resources have recently entered into a merger, in order to be the largest metallurgical coal producer in the U.S. The operations of this merged company will be held in West Virginia & South Virginia. The merger is anticipated to save up to about $50Mn per year. This deal will aid Contura and Alpha in increasing its scale and financial muscle, which in turn will lend more capital to the companies for further acquisition.
- Peabody Energy Corp., a leading metallurgical coal producer, recently acquired Shoal Creek Seaborne metallurgical coal mine for US$ 387 Mn. The transaction includes preparation plant, mine, and logistical assets. The company believes that acquisition will offer it crucial strategies and finances in order to create additional shareholder value. The company expects the latter to integrate its operations into Peabody’s operation with as minimum friction costs as possible.
Metallurgical Coal Market Dynamics
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Convergence of Technology and Coal Producing Methodologies to Foster the Growth of the Metallurgical Coal Market
The global metallurgical coal market is witnessing significant breakthroughs in the mining industry, on account of technological advancements. With the increasing shift towards automation, the operations of the mining industry are eased by the developments in artificial intelligence, machine learning, and robotics. The mining companies are leveraging next-gen technologies like Internet of Things and big data to create a connected network, in order to collect, monitor and process the data. This helps the mining companies in controlling their resources and trigger the growth of metallurgical coal market.
In addition to the mining methodologies, the drilling techniques are transforming too. Advanced diesel-hydraulic engine allows the resources to drill more efficiently and securely. Ease of producing metallurgical coal is expected to reflect positively on the global metallurgical coal market.
China Dominates the Global Metallurgical Coal Market, Owing to its Large-scale Production Capacity
Metallurgical coal has been traditionally consumed for two applications – for
generating electricity and producing steel. Among the significant countries of the world, who are engaged in producing metallurgical coal, most of them primarily carry out the activity for export. On the contrary, China, the world’s largest coal producer, consumes almost all the coal domestically.
Increasing rate of population in China have pervasive need for electricity. Moreover, rapid urbanization and industrial revolution underpinned by technology have in turn created demand for electricity. This has resulted in an acute demand for metallurgical coal for generating electricity.
Rising Environmental Concerns Will Restrain the Growth of the Metallurgical Coal Market
There has been growing concerns about environmental degradation, on the back of the extensive utilization of fossil fuels, like metallurgical coal, across various geographies. As a result, stringent laws and promulgation pertaining to the air quality standards are legislated, on the back of the emission of nitrogen dioxide, sulfur dioxide, and photochemical ozone.
Besides degrading the atmosphere, the emission of harmful gases produced by the heating of metallurgical coal, in turn, damages the natural habitat of the aquatic systems and forests. The ambient air quality standards to restore healthy atmosphere is one of the most crucial factors restraining the growth of the global metallurgical coal market.
Metallurgical Coal Market Segmentation
Metallurgical coal market can be classified on the basis of coal grade, regions, and applications.
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