Petroleum (pet) coke import prices have continued to remain at elevated levels over the past week, while Indian demand has mellowed considerably due to exorbitant freight rates and competitively priced thermal coals.
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 (LTC). Indian cement companies typically procure part of their pet coke imports through LTC.
Presently, however, major Indian cement producers are largely refraining themselves from making spot bookings of seaborne pet coke in consideration of unviable prices and supply uncertainty.
At the same time, the Indian cement industry is seen temporarily switching to imported thermal coal like Australian high-calorific value (CV) and US mid-CV varieties as alternative fuels, which are relatively cheaper.
Notably, imported thermal coals on a comparative heat-value basis from the above-mentioned origins are available to Indian cement producers at prices of $90-100/tonne (t) against pet coke prices of $120-130/t.
Price assessments
The current average prices of US-origin pet coke (6.5% sulphur) are assessed at $130-131/t on CNF India basis, as against the earlier prices of $129-130/t, a marginal increase of $1/t week-on-week (w-o-w).
Offers for Saudi-origin pet coke (9% sulphur) are presently hovering around $125-126/t CNF India, unchanged on the week.
The US Gulf Coast (USGC) FoB prices of pet coke (6% sulphur), widely accepted as the reference across international markets, have increased by $5/t to $83-84/t over $78-79/t prevailing a week ago.
Average shipping freight rates from USGC to Indian ports for Supramax vessels of 50,000-55,000 deadweight tonnes (DWT) are currently assessed at $46.75/t, compared with $44.50/t in the last week. Thus, there has been an increase of approximately $2.25/t w-o-w in ocean freight.
Outlook
Even as Indian cement players await price corrections in the international pet coke markets, not too much is expected in the short term because of tight availability in key source markets like the US and Saudi Arabia.
Going forward, Indian market participants expect a further decrease in the country’s pet coke import volumes with consumers increasingly switching to thermal coal.
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