Do the independent coking plants in Shanxi still have advantages?

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Author: Wang Le Yi, Zhao Hui; Time: 2009-12-1 16:05:37. The industry has been in a downturn for a long time, and the impact of \"steel conglomerates\" is significant. Since November, the selling price of coke in Shanxi Province has increased by 20 to 30 yuan per ton. However, officials from the Coking Industry Association of Shanxi Province said that this rise in coke prices is a short-term phenomenon and not sustainable. The China Coking Industry Association has also made predictions regarding the future of the coke market: due to both overcapacity in steel production and a shortage of coking coal resources, the coke industry will continue to face the dilemma of increased production without corresponding increases in revenue in 2010. 　　Currently, steel companies are frequently extending their industrial chains upstream by establishing their own coking plants, and leveraging their technical and financial advantages to compete with independent coking enterprises. Last year, our country consumed 300 million tons of coke, while the production capacity for coke exceeded 400 million tons; the overall capacity utilization rate was less than 75%. The capacity utilization rates for independent coking enterprises and those for coal companies in terms of coke production were on average 60%. There is severe waste of social resources, and many people are pessimistic about the prospects of independent coke producers. In Shanxi Province, 90% of the coking enterprises are private companies, and over 90% of them are independent coking plants. With the entire industry in a prolonged downturn, have independent coking enterprises in Shanxi lost their competitive advantages? On November 23, a reporter interviewed Tian Bo, the chief engineer of Shanxi Coking Group Company, on this topic. 　　Geographical advantages: Traditional strengths remain. Tian Bo explained that currently, Shanxi Province has an annual coke production capacity of around 160 million tons, the highest in the country. In addition, the regions with higher production capacity are Shandong, Hebei, and Inner Mongolia. Due to the significant variations in coking coal resources across different regions, there are also large differences in coke quality. Only Shanxi is able to produce first-class, second-class, and foundry coke using its own domestic coking coal resources, while other regions must rely on coal imported from outside to produce high-quality metallurgical coke. 　　The currently more \"popular\" practice is for steel companies to operate their own coking plants. However, most coking plants of steel companies are located in the eastern coastal areas, and the coal used for coking relies entirely on imports from outside. Compared to purchasing 900,000 tons of metallurgical coke from external sources, a joint steel enterprise that produces 900,000 tons of such coke on its own requires an additional 500,000 tons of transport capacity. At a transportation cost of 120 yuan per ton of coal, an additional 60 million yuan in transportation costs will be incurred each year. Furthermore, since the raw coal is a powdered bulk material, its transportation loss is greater than 2.5%. In contrast, independent coking enterprises in Shanxi Province are mostly located in inland coal-rich areas, where 70% of the coal required for coking can be obtained within a radius of 80 kilometers, resulting in much lower transportation costs. 　　Coke oven gas: Gaining competitiveness  Recently, many provinces, including Shanxi Province, have faced shortages in natural gas supply. Therefore, the by-product coke oven gas from coking enterprises also exhibits a clear competitive advantage. Tian Bo said that for every ton of coke produced, approximately 400 cubic meters of coke oven gas are generated. The main components of coke oven gas are hydrogen and methane, making it a high-quality secondary energy source with the lowest carbon dioxide emissions; it is also an excellent raw material for producing methanol, hydrogen, and methane. 　　Approximately 45% of the coke oven gas generated during the coking process in independent coke plants is consumed by the coke ovens themselves; a coke plant with a capacity of 1 million tons can produce 220 million cubic meters of coke oven gas per year. The carbon dioxide emissions resulting from the equivalent heat content of coke oven gas are only 60% of those from natural gas; when thoroughly purified, coke oven gas serves as an excellent fuel for urban use, superior to natural gas. 　　Tian Bo explained, “By deeply purifying the remaining coke oven gas from areas where independent coking enterprises are concentrated, and then feeding it directly into the West-East Gas Transmission pipeline, the economic, social, and environmental benefits generated can be on par with those obtained from using coke oven gas produced by coking plants owned by steel companies.” ”Currently, the price at the ports where natural gas is imported into our country is 2 yuan per cubic meter; by the time it reaches users in the central and eastern regions, the cost rises to over 3 yuan per cubic meter. A coking plant with an annual production capacity of 1 million tons of coke generates an amount of excess coke oven gas equivalent to 100 million cubic meters of natural gas per year; currently, coking enterprises in the central and western regions have more than 10 billion cubic meters of such excess gas available. Using the remaining coke oven gas from independent coking enterprises to produce methanol and coal-based methanol offers significant competitive advantages. 　　Restructuring: Great potential in the future. Most independent coking enterprises in Shanxi Province are located in areas where coking coal is available; these areas offer a wide range of coking coal varieties of good quality, resulting in low costs for coal procurement. However, these independent coking enterprises face various disadvantages, including generally small scales, which hinders the comprehensive utilization of the gas produced by coke ovens, as well as the lack of thorough purification of this gas. 　　Regarding the future of independent coking enterprises in Shanxi Province, experts believe that in addition to forming large-scale coking plants by combining forces with steel companies to achieve integration of coal, coking, and steel production, mergers and reorganizations among these enterprises should also take place without an increase in production capacity, so as to gain advantages in terms of scale and technology. 　　Furthermore, **and industry associations should encourage coking enterprises to thoroughly purify the remaining coke oven gas, allow such gas to be integrated into the natural gas pipeline network transporting gas from the west to the east, and implement a policy of equal pricing for similar products. For coking enterprises located far from the West-to-East Gas Transmission pipeline network, they should be encouraged to deeply purify the remaining coke oven gas and use it as a regional gas supply, or to combine coke oven gas methanol production technology with dry quenching technology to utilize the remaining coke oven gas. Article source: Author: Wang Le Yi, Zhao Hui