India: Pet coke imports subside sharply on subdued buy interest

India’s petroleum coke imports have decreased by 78% to 0.29 mn t in April 2021 as compared to 1.34 mn t in the corresponding month of last year.

Also, on month-to-month basis, the country’s pet coke imports declined 48% last month, compared with 0.56 mn t in March 2021.

This is understood to be primarily driven by reduced usage of high-priced pet coke and increased coal consumption in the fuel mix to manage cement makers’ costs.

Seaborne pet coke prices hover close to all-time highs

Indian-delivered prices for seaborne petroleum coke have continued to increase steadily on the back of a consistent demand recovery since July last year.

The average price of US-origin 6.5% sulphur pet coke has more than doubled since last May to a near record high of $130/t CNF India. The increase has also been partially driven by an increase in freight rates for Supramax vessels on the US Gulf-India route apart from higher FOB prices amid continued availability constraints.

Offers for 9% sulphur pet coke from Saudi Arabia are currently assessed in the range of $125/t CNF India.

Shipping freight rates from the US Gulf Coast (USGC) to Indian ports for Supramax vessel (50,000-55,000 tons deadweight (DWT)) are hovering at its highest multiyear level of around $48/t.

India’s domestically-produced pet coke prices have also firmed consistently up over the same period, following a steady resurgence in end-user demand from cement manufacturing companies.

Current Market Scenario & Near-term Outlook—

The Indian market has been lately observing a considerable decrease in enquiries for seaborne pet coke, alongside lesser number of spot transactions other than existing long-term contracts.

Even as India’s major cement players wait for price corrections in the international pet coke market, any major price correction is not expected in the short term because of tight availability in key source markets like the US and Saudi Arabia since mid-2020.

Indian domestic pet coke prices, on the other hand, remained supported by robust demand from the Indian cement industry due to increased infrastructural activities. But with the recent implementation of Covid-related lockdowns by various state governments, cement production may decrease, causing lower demand for pet coke in near future.