Abstract:Mainland coking coal is mainly used as a coking raw material and is widely used in the blast furnace ironmaking process. During January 2024, hot metal production continued to climb, which partly drove the sales growth of coking coal. However, the finished steel market is still in the off-season, and the end demand has not achieved substantial improvement. This means that the growth of coking coal sales may only be short-term, and the uncertainty of future market demand remains. Overall, compared with the previous period, the overall supply tension of coking coal has eased. This change is also reflected in the market price, which on February 10, 2024, the market price of China's coking coal was 2,375 yuan/mt, down 1.04% year-on-year.
1. Definitions and Classification
Coking coal, also known as main coking coal, is a kind of bituminous coal with medium and low volatile content, medium cohesiveness and strong cohesiveness. Coking coal is an important upstream raw material for the coking and steel industries, and coking coal connects the three industries of coal, coke and steel, and plays an important role in the industrial chain. According to the national standard for coal classification in China (GB5751-86), coking coal can be divided into two categories.
Second, industry policies
1. Competent authorities and regulatory system
The coking coal industry authorities include the National Development and Reform Commission, the Ministry of Natural Resources, the Ministry of Ecology and Environment, the Ministry of Industry and Information Technology, the Ministry of Emergency Management, the State Mine Safety Supervision Bureau, and the National Energy Administration.
The National Development and Reform Commission formulates medium and long-term industry development plans, The Ministry of Natural Resources supervises the development, utilization and protection of natural resources, establishes a spatial planning system and supervises its implementation, fulfills the responsibilities of the owner of all types of natural resource assets owned by the whole people, uniformly investigates and confirms the registration of rights, establishes a system for the paid use of natural resources, and is responsible for the management of the surveying and mapping and geological exploration industries. The Ministry of Industry and Information Technology formulates and organizes the implementation of industrial industry plans, industrial policies and standards, and monitors the daily operation of the industrial industry; the Ministry of Emergency Management organizes the preparation of national emergency response plans and plans, guides all regions and departments to respond to emergencies, and promotes the construction of emergency plan system and plan drills. Establish a disaster reporting system and publish the disaster situation in a unified manner, coordinate the construction of emergency response forces and material reserves and make unified dispatch during disaster relief, organize the construction of a disaster relief system, guide emergency rescue in production safety and natural disasters, and undertake the work of the national headquarters for responding to particularly major disasters. Guide the prevention and control of fires, floods and droughts, geological disasters, etc. Responsible for the comprehensive supervision and management of production safety and the supervision and management of production safety in the industry, mining and commerce industries. The State Mine Safety Supervision Bureau exercises the power of national mine safety supervision in accordance with the law, and is responsible for the supervision and inspection of local mine safety supervision and management, and ensures the implementation of the relevant national laws and regulations on mine safety production; Planning and policy, promoting the reform of the energy system, formulating relevant reform plans, coordinating major issues in energy development and reform, organizing the formulation of energy and other industrial policies and related standards, and examining, approving and examining energy fixed asset investment projects in accordance with the authority prescribed by the State Council.
2. Industry-related policies
China's coking coal industry is an important raw material supplier to China's steel industry, and the government has always attached great importance to the development of the coking coal industry, and has issued a series of policies to guide and regulate the development of the industry. In December 2023, the State Council issued the Action Plan for Continuous Improvement of Air Quality, proposing to explore clean transportation as the focus of review and supervision of new reconstruction and expansion projects in coal mines, iron and steel, thermal power, nonferrous metals, coking, coal chemical and other industries. This is conducive to the development of the coking coal industry in a more environmentally friendly and sustainable direction. By emphasizing clean transport, the government encourages companies to adopt more environmentally friendly modes of transport and reduce pollutant emissions from the mining, processing and transportation of coking coal, thereby reducing the negative impact on the environment of the coking coal industry.
Third, the development process
The development of China's coking coal industry is closely linked to China's industrialization process, and its development has gone through four main stages.
The embryonic period from 1949 to 1978. In the early days of the founding of the People's Republic of China, the iron and steel industry began to take off, and as the main raw material for steel production, the coking coal industry also gradually emerged. At this stage, the coking coal industry mainly relies on state-owned enterprises for production, and the scale of production capacity is relatively small.
A period of rapid development from 1979 to 2000. With the deepening of reform and opening up, China's coking coal industry has begun to introduce market mechanisms, the number of enterprises has gradually increased, and the scale of production capacity has gradually expanded. At the same time, with the rapid development of the steel industry, the demand for coking coal is also increasing, which has promoted the rapid development of the coking coal industry. At this stage, the coking coal industry has experienced several capacity expansions, but there are also some problems, such as waste of resources and environmental pollution.
Structural adjustment period from 2001 to 2010. In the 21st century, China's coking coal industry is facing new challenges and opportunities. On the one hand, the rapid growth of domestic steel production capacity has led to a surge in demand for coking coal, which has promoted the continuous rise of coking coal prices, and on the other hand, with the improvement of environmental protection requirements, the coking coal industry has begun to strengthen environmental protection governance and promote green development. At this stage, the government has introduced a series of policies, including measures for capacity control, environmental protection, and safe production, to guide the healthy development of the industry. At the same time, coking coal enterprises have also increased investment in technological innovation and research and development to improve product quality and environmental protection.
High-quality development period from 2011 to the present. In recent years, with the transformation and upgrading of the steel industry and the continuous improvement of environmental protection requirements, China's coking coal industry is also gradually developing towards high-quality development. Enterprises began to pay attention to brand building, market expansion and industrial chain extension, and enhanced market competitiveness by increasing product added value and reducing costs. At the same time, the government has also stepped up its support for the coking coal industry to promote technological innovation and green development in the industry. At this stage, the coking coal industry not only focuses on scale expansion, but also pays more attention to quality, efficiency and sustainable development.
Fourth, industry barriers
1. Market access restrictions
First of all, the development of coking coal resources is affected by local protectionism, due to the uneven distribution of coking coal resources, some places have adopted certain restrictive measures on the access of external enterprises, making it difficult for external enterprises to obtain sufficient coking coal resources. Second, the coking coal industry has a high degree of market concentration, with large state-owned enterprises already occupying a large market share, and new entrants are facing a high market entry threshold. In addition, coking coal mining and production involves a large number of environmental pollution and safety risks, and the government has set stricter standards and review procedures for the admission of new enterprises in order to control excess capacity and environmental pollution.
2. Technical barriers
The technical barriers of the coking coal industry are mainly reflected in mining technology, processing technology and environmental protection technology. First of all, coking coal mining requires specialized technology and equipment, and it is very difficult for new entrants to master these technologies and put them into production in a short period of time. Secondly, the processing process of coking coal also needs corresponding technical support, such as coking technology, coal gasification technology, etc., and the mastery and application of these technologies have an important impact on the product quality and market competitiveness of enterprises. Finally, with the continuous improvement of environmental protection requirements, the coking coal industry also needs to invest a lot of money and energy in the research and development and application of environmental protection technology, which is undoubtedly a huge cost burden for new entrants. Therefore, technical barriers are one of the important factors hindering new entrants from entering the coking coal industry.
3. International trade frictions
China's coking coal industry also faces barriers from international trade frictions. As an important energy raw material, coking coal trade is affected by international market fluctuations and trade protectionism. Some countries have adopted trade remedy measures such as anti-dumping and anti-subsidy measures against coking coal products, restricting the export of Chinese coking coal products. In addition, international trade frictions have also brought about exchange rate fluctuations, increased international transportation costs and other problems, which have caused certain uncertainties and challenges to the international trade of Chinese coking coal enterprises.
Fifth, the industrial chain
1. Analysis of the industry chain
The upstream of the industrial chain of China's coking coal industry is mainly coal mines and machinery and equipment, of which the machinery and equipment include shearers, bolting rigs, crushers, etc., the middle of the industrial chain is coking coal manufacturers, which process and treat the mined coal, and the downstream is mainly dominated by the iron and steel industry, non-ferrous metals, foundry and ferroalloy smelting.
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