Coal

Fundamentals

Products

Coal is the largest source of energy for the generation of electricity worldwide, as well as one of the largest worldwide anthropogenic sources of carbon dioxide releases.

Coal  is a combustible sedimentary rock. Coal is a fossil fuel which forms when dead plant matter, covered by a layer of sediment, is converted in sequential steps into coal. This involves biological and geological processes that take place over a long period. The result of this long transformation process is a readily combustible black or brownish-black sedimentary rock that is composed primarily of carbon. Coal is extracted from the ground by coal mining, either underground by shaft mining, or at ground level by open pit mining.

As geological processes apply pressure to dead biotic material over time, under suitable conditions it is transformed successively into:


Coal product chain

Depending on the intrinsic qualities of the coal, usage will be different and the market distinguishes between:


Coal products


  • Coal is primarily used as a solid fuel to produce heat and electricity through combustion. Hence the feature most looked for is its calorific value (CV) which is strongly correlated to carbon (C) content.
  • When extracting coal it is often wet. The humidity of this 'as received' coal is known as Total Moisture (TM).
  • When heating this coal in the absence of air (to avoid combustion), the hydrogen contained within the rock itself or Inherent Moisture (IM) is first liberated, then other components (various hydrocarbons, sulfur) referred to as Volatile matter (VM). What finally remains is called Fixed Carbon (FC).
  • Ash is the non-combustible residue left after coal is burnt. It represents the bulk mineral matter after carbon, oxygen, sulfur and water has been driven off during combustion.
  • Analysed as well are the content of undesired components, mainly Sulfur (hazardous and very corrosive) and for metallurgical coal, Phosphorus (could blend with the metal).
  • Physical characteristics measured are hardness or grindability and for coke production how strong coal remains in furnace conditions.
  • Of importance for Coke is the Coke Strength after Reaction (CSR), a measure of physical strength of hot coke, which will have to support the weight of the iron ore when used in a blast furnace.


Characteristics, Thermal coal

Characteristics, Coking coal

Characteristics, Measurement basis

Thermal coal

Thermal coal qualities will mainly be graded on Calorific value and Sulfur content.

Coking coal

There are three main categories of coking coal:

  • Hard coking coal (HCC) that forms high-strength coke.
  • Semi-soft coking coal (SSCC) that produces coke of lesser quality.
  • PCI coal, generally not considered to be a coking coal. It is used primarily for its heat value in the steel production process and is injected into a blast furnace (Pulverized Coal Injection or PCI ) to replace more expensive coke.
  • Met coke. Not a coal but coke resulting from high-temperature retorting of bituminous coal. It is used as a fuel in shaft furnaces.


Thermal coal grades

Coking coal grades

Geography

Coal trading is concentrated on the major mining regions (Newcastle in New South Wales, Indonesia, India, Richards Bay in South Africa, Central Appalachian and Powder River in the US) or the major consumption areas (China, India, Rotterdam).

Markets

Markers

The Price Reporting Agencies for the coal spot markets are mainly Platts and Argus. Both those agencies broadcast as well prices gathered by publishers operating on local markets, such as Fenwei Energy for the Chinese market, Coalindo Energy for the Indonesian market and IHS McCloskey which scans more broadly several markets in the world.

Contracts

There are several coal futures defined. They cover either the major mining regions (Newcastle in New South Wales, Indonesia, Richards Bay in South Africa, Central Appalachian and Powder River in the US) or the major consumption areas (China, Rotterdam).



Coal publications

Thermal coal markers

Thermal coal markers per delivery

Coking coal markers

Coal contracts