India Petcoke Prices to Harden as SC Urges Decision on Nationwide Import Ban

The Supreme Court of India has reportedly asked the Central government to take a decision on banning imports of petroleum coke on environmental grounds, latest by 30 Jun’18.

In Oct’17, the apex court had ordered a ban on the use and sale of petcoke in and around the National Capital Region to help curb pollution.

The Central government, in pursuance to the court order, was formulating a nationwide policy on petcoke usage in consultation with the Ministry of Petroleum and Natural Gas and the Directorate General of Foreign Trade.

Notably, India is the world’s biggest consumer of petroleum coke, while the US is its largest exporter, followed by Saudi Arabia. During the previous fiscal, India’s total petcoke consumption exceeded 23 MnT; with the country’s domestic production totaling 13.9 MnT and imports at around 10 MnT mainly sourced from both the key international markets — USA and Saudi Arabia.

Cement manufacturers, mostly, prefer using petcoke as a key input material, because it contains higher calorific value (7,500-8,500Kcal/kg) as compared to non-coking coal (2,200-7,000Kcal/kg). However, sulphur level found in petcoke is 65,000-75,000 parts per million (ppm), dramatically higher than 4,000 ppm in coal, according to Environment Pollution (Prevention & Control) Authority (EPCA).

Banning petcoke import would either make users switch to alternatives or it may also raise local prices on account of creating a monopoly situation.

Even though such price escalation may not significantly hamper the consumption of petcoke in India, however, analysts predict that the pace of demand growth for the fuel could eventually slack off.

On the pricing front, there was neither any change in the international offers nor in the domestic prices in India. The latest offers for petcoke (6.5% sulfur) from USA are assessed at around USD 113/MT CFR, and offers for petcoke (9% sulfur) from Saudi Arabia are assessed at around USD 110/MT CFR; both these offers have stay unaltered since the last four weeks.

In India, the prevailing domestic petcoke prices are at: INR 9,050/MT (Reliance Industries Ltd.), INR 9,040/MT (Essar) and INR 8,230/MT (Mangalore Refinery and Petrochemicals Ltd.).