India's pulverised coal imports surge 6% in 2021 as coking coal prices hit record highs

*Pulverised coal injection (PCI) slashes met coke usage

*Coking coal market volatility boosting PCI usage

*Furnace design essential to increasing PCI

India's imports of coking coal edged higher in calendar year 2021 (CY'21) in the same pace with imports of pulverised coal injection (PCI) coal increasing by around 6% to 12.43 million tonnes (mnt) from 11.7n mnt in 2020.

Notably, in CY'19, PCI imports had been recorded at over 12 mnt. High coking coal costs in a supply-sensitive market are driving Indian integrated steelmakers to look for avenues to reduce metallurgical coke usage.

This is especially pertinent in the context of the rally in hard coking coal (HCC) prices that started in Oct'21, reaching record levels of $600/t CFR China before falling sharply in Nov and stabilising at around $400/t CFR China.

However, prices are rallying again as supply concerns have re-surfaced.

As far as PCI usage goes, the main cost benefit is the replacement of high-cost coking coal, though other benefits such as improved productivity have also been observed.

PCI in Indian furnaces

"In modern BFs, the use of oxygen has been enhanced to 6-8% and PCI of around 170-200 kg/per tonne of hot metal (thm). Some producers have gone up to 200 kg PCI and the cost per tonne of hot metal from these furnaces is lower compared to traditional furnaces", a steel mill owner in Odisha told SteelMint.

About 200 kg of PCI means 330-340 kg of coke per tonne, so coke consumption comes down drastically. This means that sized ore, pellets etc. burden can be radically improved.

However, it is important to note that while increased PCI usage is a go-green method for integrated steelmakers in India, the foremost criterion is gas permeability in BF that met coke, above all, ensures.

"PCI is priced much lower even while coke is costly. So with oxygen enrichment, if the PCI volume is increased, cost of production can be brought down. State-of-the-art furnaces that achieve a higher blast/temperature helps in increasing productivity," a steel mill source informed SteelMint.

While a 300 cubic meter BF (production 1,200 TPD) goes for 200 kg PCI per tonne of molten pig iron and oxygen enrichment of 6%, a small BF achieves 4% productivity even as a 2000 cubic meter BF achieves productivity of 3.2 to 3.3.

So, if producers lessen the amount of coke charging from the top, that much extra ore can be charged. With modernisation of blast furnaces (bell less top) and with oxygen enrichment and increase in PCI use, the same furnace can produce up to 1,400 TPD.

The new top-fired Russian technology has increased the furnace temperature from 950 degrees to 1250 degrees. This has enhanced productivity and lessened fuel consumption.

Tata, JSW, AM/NS India plants run at 1250 degrees and their hot metal cost per tonne is INR 3,000-4,000/t lesser than others, SteelMint learnt from sources.

PCI grade

India imports 7,800 kcal/kg low-vol PCI with 13% volatile matter, 8.5% ash, 0.55% sulfur as well as mid-tier PCI with 15% VM, 12% ash, 0.55% sulfur.

Australia held the slot of the leading exporter to India in CY'21with 9.5 mnt, followed by Brazil with PCI exports of around 2.6 mnt.

Paradeep and Dhamra were the two ports that handled the highest volumes of PCI cargoes in CY'21 at 3.2 mnt and 2.25 mnt, respectively.