Supply Shortage of Coal Tar   

By Li Yucai   

The output has grown stably
Coal tar is a byproduct in coking. The yield is usually 2.5%-4.0% of coking dry coal and the output is closely related to the output of coke. The capacity of coke in China has expanded rapidly in recent years and is already in surplus today. Local governments have taken various measures to intervene. Nevertheless, the output of coke in enterprises with considerable scale (with sales revenue of over RMB5.0 million) still reached 280.5 million tons in 2006, an increase of 20.5% over 2005 and the output of byproduct coal tar was around 9.85 million tons, an increase of 18%.
   In spite of some fluctuations, the price of coal tar has presented an overall rising trend in recent years. It is still maintained at a relatively high level in 2007.
   Since the end of 2005 several large coal tar processing plants have started production and the coal tar processing capacity has increased rapidly. According to incomplete statistics, the total production capacity of coal tar processing units with considerable scale has reached 8.93 million t/a and there are already signs of processing capacity surplus. Large coal tar processing units are still being constructed in regions with high coal tar output. The demand for coal tar will further increase and coal tar will be in short supply.

The demand in non-processing sectors has increased constantly
Coal-series fuel oils are mainly produced from coal asphalt, creosote and coal tar. The crude oil price has been maintained at a high level and the oil processing depth has kept increasing in recent years. The demand for coal-series fuel oils used as heavy oil substitutes has increased constantly.
   The consumption of coal tar in coal-series fuel oils was 3.0 million-3.5 million tons in 2006, accounting for more than one-third of the total coal tar consumption.
   Besides, coal tar has gained more and more applications in anticorrosion and construction material sectors in recent years.

The growth of output will be slowed down
The growth of coal tar output is mainly determined by the growth of the coke output and the increase of the coal tar average yield. China has exercised macro control on the iron and steel sector. Compulsory elimination of indigenous coking and modified coking units is also conducted through measures such as raising the admission threshold. The export of coke is also restricted. The growth of the coke output is therefore already suppressed. The dissemination of coking in large mechanical coke ovens will promote the increase of the coal tar yield, but its output growth of coal tar will still be slowed down.

Coal tar processing enterprises will have supply shortage of raw material
The promulgation of state policies and related environmental protection regulations will urge coking enterprises to develop towards large-scale production. Large coke production regions usually have their own coal tar processing units. For example, Shanxi Lubao Group and Hebei Risun Coking Group have constructed coal tar processing units. The supply amount of coal tar in the market has therefore reduced remarkably and coal tar processing enterprises will be faced with raw material supply shortage.