Pet Coke: Domestic Prices Reduced for Sixth Month in Row; Import Offers Unchanged

Reliance Industries Ltd. (RIL) has decreased petroleum coke price for this month by INR 200/MT to INR 6,900/MT with effect from 1 Aug’19, over its previous price of INR 7,100/MT, which was applicable from 1 Jul’19.

Notably from Mar’19 onwards, there has been price reductions in every month and the overall reduction by RIL has been over INR 2,200/MT, in different stages of subsequent revisions.

Similarly, Nayara Energy (erstwhile Essar Oil) has also revised its pet coke price w.e.f. 1 Aug’19 to INR 6,890/MT, a decrease of INR 200/MT against its last price of INR 7,090/MT.

Mangalore Refinery & Petrochemicals Ltd. (MRPL) has also reduced pet coke price w.e.f. 1 Aug’19 to INR 6,800/MT from INR 7,400/MT, for road supplies.

MRPL’s price for rake/barge supplies has been reduced to INR 6,580/MT from INR 7,100/MT.

Price Commentaries

This is the sixth consecutive price reduction by RIL – India’s largest pet coke producer –totaling INR 2,250/MT from a level of INR 9,150/MT in March.

This is mainly due to reduction of pet coke prices in the international market. Further, prices of high calorific value imported coal, mainly US thermal coal, have also dropped, which in turn forced pet coke prices to cool down from their high levels in March.

Nayara Energy typically follows the RIL pricing and generally maintains a difference of INR 10/MT with respect to the RIL price. Hence, its price decrease is by the same amount of INR 200/MT as RIL.

MRPL’s price reduction of INR 520/MT is sharper than the reduction of INR 200/MT by RIL, who are operating in different market than RIL. This higher reduction is probably due to lower demand in monsoon and is targeted for increasing the volume.

MRPL has maintained the price difference of INR 300/MT between its road supplies and rake/barge supplies, which is the estimated expenditure incurred by the customers to shift the product from the refinery for rake/barge loading.

Indian Oil Corporation (IOCL), the second largest producer of pet coke, is yet to revise its prices from various refineries. It is expected that IOC may also follow the trend of price reduction set by RIL, in its forthcoming price revisions.