All activity in the Petcoke market in India has stalled. The market participants are waiting for hearing the final Supreme Court verdict on 4Dec’17, when the apex court is expected to declare whether the exiting Petcoke ban will be extended upto other states as well. Some optimistic Petcoke users also apprehend that the court might impart some relaxation to the existing ban, which also is a possibility given the economic merits of the fuel. However, a market study done by CoalMint reveals that nothing concrete could be predicted at this stage.
Despite the environment implications, the ban has negatively impacted the entire user chain of industries. Industry segments using the fuel are many, like cement, textile, chemicals, plastics, forging etc; which are now left with no other options but to switch over to alternate fuels, like Natural Gas or other coal forms—mainly USA origin coal.
At the same time, the extension of the ban to Rajasthan has severely impacted the cement industry, the largest user industry for the fuel. In Rajasthan most of the cement plants are situated, mainly due to the availability of lime, a critical input for cement production. The state bears 12% of the total limestone reserves in the country. Cement producers now have the option of using USA origin coal, which bears the calorific value of around 7,200 GAR, almost close to that for Petcoke, at around 7,600 GAR.
Nevertheless, the market dynamics will take the due course after the apex court declaring its final order on 4Dec’17.
On the pricing side, there was no change in the domestic prices. Indian producers now have no reason to revise their ex-works price, given the ban in place.
Reliance Industries Limited (RIL), the largest Petcoke producer in India, has quoted its ex-works price at INR 8,100/MT, and Essar, the second largest producer has quoted its ex-works price at INR 8,090/MT. Mangalore Refinery and Petrochemicals Limited (MRPL) has priced its Petcoke at INR 6,950/MT (ex-works).
Source: CoalMint Research
In the international context, the offers for Petcoke(6.5% Sulphur) from USA drifted downwards to around USD 102/MT CFR India by around USD 4/MT from the week-ago rates—mainly due to shrinkage in demand in India. However, the offers for Petcoke (9% Sulphur) from Saudi Arabia have remained almost unmoved at around USD 98/MT CFR India relative to the offers in the week last.
Source: CoalMint Research
IMPORTS
During the 1-24Nov’17, around 0.39 MnT of Petcoke had landed at Indian ports, data compiled by CoalMint Research shows.
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