Petcoke prices are resuming upward trend in India, adding further cost pressures to cement producers. Reliance Industries Limited (RIL), the largest petcoke producer in India, has just raised its prices by INR 100/MT to INR 9,050/MT, with effect from 1May’18.
The price hike seems to be induced by the consistent high prices of global fuel-grade petcoke. The latest offers for US petcoke with 6.5% sulfur are assessed at USD 113/MT CFR. Simultaneously, the recent offers for petcoke (9% sulfur) from Saudi Arabia are at around USD 110/MT CFR.
Given the “sky high” international offers coupled with limited availability due to ongoing refinery maintenance in the US, most Indian buyers have preferred the domestic market for their petcoke procurement—hence, strong demand has been prevailing in the country’s domestic markets.
Notably, this price increase comes at a time when lingering uncertainty over Indian petcoke restrictions in the past six months has considerably trimmed demand as Indian buyers increasingly turn towards thermal coal from the US to meet their requirements.
Furthermore, imported supplies are tight for both US and Saudi Arabia, and refineries are hesitant to offer to India given the uncertainty around the usage within their country.
In November, the Supreme Court banned petcoke use in a few states around the National Capital Region in a bid to curb pollution.
Though the restriction was relaxed later, it was followed by an import duty hike on petcoke from 2.5% to 10%. Analysts estimate landed cost of petcoke to increase by around 6% considering the import duty hike.
However, increased prices may not significantly hamper demand for petcoke from cement makers because imported coal, i.e. an alternative to petcoke, is equally expensive.
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