LONDON: It is imperative for carbon steel producers to have secure supply of metallurgical coke to ensure stable and efficient operation of their blast furnaces (BF).
Steelmakers also benefit from using coke with consistent technical specifications, namely CSR and ash content in their BFs. For these reasons alone it is prudent for steelmakers to fully control their coke supply by building their own coke ovens, but there are other factors that may impact their coke supply strategy.
This Insight explores the patterns of coke plant investment and the financial factors that steelmakers must consider when deciding to invest in making their own coke or sourcing it from the third-party market.
Integrated steelmakers striving to be self-sufficient in coke
CRU has conducted significant primary research on investment into the construction of both brand new and remediated coke capacity over this decade. This includes coke capacity as part of greenfield integrated steel plants and also existing or previously idled coke capacity that has been fully rebuilt and returned to an operating state. Our research identified coke plants were built throughout major steelmaking countries and regions, such as Europe, USA, Japan, South East Asia and Russia, and by large steel companies, such as ArcelorMittal, JSW, JFE, US Steel and MMK. The average size of the coke plants identified was ~1.4 Mt/y - enough coke to support a ~3 Mt/y BF operation - but build capacities increased over the course of the decade.
In terms of capital expenditure, the average capital cost of the coke batteries specifically was ~$270 per tonne of annual coke making capacity (/tACC). We have standardised this figure to include all essential parts and construction costs associated with a typical heat-recovery coke battery, including coke dry quenching (CDQ), as well as auxiliary facilities such as coal storage yards, screening stations and handling systems. In addition to this cost, investments also need to be made in associated facilities, such as by-product recovery plants, which our research suggests costs ~$70 /tACC. This helps to reduce emissions by capturing the gas produced by the coke oven, extracting valuable by-products (such as benzol, coal tar and ammonium sulphate) for sale in the third-party market and purifying the gas for use elsewhere in the steelworks, such as in the sinter plant or BFs.
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