India: Domestic Pet Coke Prices Fall 25% YoY — Lowest Ever Since Aug’16

Reliance Industries Ltd. (RIL) has reduced its petroleum coke price ex-Jamnagar refinery with effect from 1st Jun’20 to INR 5,697/MT, over its last month’s price of INR 5,892/MT, a decrease of INR 195/MT.

Nayara Energy (erstwhile Essar Oil) has also decreased pet coke price to INR 5,705/MT, over its last month’s price of INR 5,890/MT, a decrease of INR 185/MT. The price of Nayara Energy continues to be in tune with RIL price and is within variations of INR 10/MT.

Indian Oil Corporation Ltd. (IOC), the country’s second-largest pet coke producer, is yet to revise pet coke prices from its various refineries.

Mangalore Refinery & Petrochemicals Ltd. (MRPL) had rolled over its pet coke price for road supplies in May’20 at INR 6,490/MT, same as in the previous month. MRPL had also maintained its pet coke price for supply by rake/barge at INR 6,190/MT in May’20.

Price Commentaries

RIL’s price reduction in the current month has been moderate, after a substantial reduction in May’20 by INR 1,223/MT, subsequent to consecutive price increases over the previous three months, starting from Feb’20.

These consecutive price cuts for two months in a row can be primarily attributed to subdued domestic demand for pet coke within the country as well as decline in international pet coke prices, which in turn is due to the slowdown in global demand caused by the ongoing corona virus (Covid-19) pandemic.

Indian demand for pet coke has perceptibly faded away following the enforcement of the nationwide lockdown since March 25, which was initially due to be lifted on April 14 but was extended multiple times to May 3, May 17 and May 31 and now further on till June 8.

In spite of certain exemptions granted by the Indian government for specified industries with appropriate protocols, only few cement plants could continue production activities, albeit with much lower capacity utilisation rates.

Although industries are gradually ramping up production and thus limping back to normalcy, it would take some more time for the demand to pick up to the ‘pre-Covid’ levels.