Analysis of Substitutability of Other Raw Material Coal to Anthracite in China

By CnAgri2012-07-31 11:17:29 Print

With rise of anthracite price (rose to 1,800 yuan/ton based on the level of June 2011, one-fold increase over the same period of 2009), the process, which relies on new coal gasification technology and uses bituminous coal, pulverized coal, lignite and other raw materials to produce urea, are gradually promoted in urea enterprises.

As the prices of above raw anthracite coal are only 40-50% of anthracite prices, making the produced urea have significant cost advantage. From the production status of Shanxi Tianji Coal Chemical Industry Group Co., Ltd, Shandong Luxi, Shandong Hualu Hengsheng, Jiangsu Linggu and other enterprises in 2010, the use of bituminous coal, pulverized coal and other raw materials to produce urea, is 300-400 yuan/ ton lower than the use of anthracite in urea production. In 2011, the cost gap is widened even to 500-600 yuan/ton. In addition, the supply of bituminous coal, pulverized coal, lignite and other raw materials is more than that of anthracite, the main production areas are relatively balanced, so the supply of raw materials to urea enterprises has obtained a good guarantee.

Meanwhile, out of environmental considerations, the current conventional coal gasification process (intermittent gasification process for fixed bed gasifier) has been prohibited by the government to be used in new production facilities; the existing urea production facilities which use the above process will be restricted and renovated gradually. Enterprises adjust the raw material coal usage, and adopt clean coal gasification and energy cascade utilization technologies as soon as possible, and rapidly achieve diversification of raw material coal, so as to respond to the increase of coal prices, which has become the urea industry trend.

As a result, BOABC believes that the substitutability of other raw material coal to anthracite raw material will continue to be enhanced. Since the majority (about 90%) of urea production facilities still adopt the traditional coal gasification process, this alternative process will last more than 10 years.