India-based Rain Industries will start up the first phase of a new coal tar pitch (CTP) facility in southeastern India in the second half of this year, as it anticipates higher CTP demand and better efficiency by locating distillation capacity near coal tar production.
Rain's new facility will process, blend and upgrade CTP in India's Andhra Pradesh Special Economic Zone, sourcing coal tar from new steelmaking facilities in the region. It will target the Indian graphite, battery and aluminium markets.
Rain will start 50,000 t/yr of capacity in the second half of this year and later add another 200,000t/yr of capacity, although it has not yet announced a timeline for the second phase.
Although the initial investment is small, "we believe it is worthwhile to penetrate the regional market" where Rain is already a major player in the calcined petroleum coke industry, Rain Industries vice chairman Jagan Reddy Nellore said. "With increased steel and coal tar production within India over the next few years, this will position us well to set up a larger distillation plant when the timing is right."
The new Indian plant will also help further "optimise" operations at Rain's North American and European distillation facilities, the company said. Rain has been using less than its full capacity at these existing facilities as the CTP market remains relatively weak, moving coal tar on oceangoing vessels to choose which plant will best suit operations. The new Indian plant will "support additional capacity utilisation at all of its existing global distillation facilities", Nellore said.
Rain had previously initiated steps to increase CTP production in early 2024, despite weak demand for its products and capacity expansion by other companies at the time. But the company expected that rising aluminium smelting capacity in India and the Middle East would increase demand for its products in the long-term.
Indonesian and Indian aluminium smelting expansions over the next two years should support demand for Rain's new CTP output, the company said. Primary aluminium producers use CTP along with calcined petroleum coke to produce the anodes used in the smelting process.
While CTP margins continue to be tight, in large part because of tight supply of coal tar raw material, "one of our coal tar supply headwinds, which is the shift to electric arc furnace steel production, is also a tailwind for us on the product side", subsidiary Rain Carbon's president Gerard Sweeney said. CTP relies on coal tar, a byproduct of blast furnace steelmaking, meaning greater steel recycling through electric arc furnaces curbs supply. But increased electric arc furnace steelmaking could boost demand for CTP, which is used to produce the graphite electrodes needed for this process. This will help improve CTP demand in Rain's major markets like North America and Europe, Sweeney said.
Global CTP supplies have been limited not only because of a shift away from blast furnace steelmaking but also production outages last year in Europe and the energy crisis in the region spurred by "geopolitical conflict", according to Rain.
India exported about 123,500t of CTP last year, up from 87,600t in 2023, according to data from Global Trade Tracker (GTT). This included shipments of 34,200t to the UAE, 24,400t to Indonesia, 18,400t to Egypt, 12,300t to Saudi Arabia and 10,500t to Brazil.
