Following a sharp rise in pet coke prices in CY’21, several major Indian refineries have reduced their offers for the third consecutive month in Feb’22, CoalMint learnt from sources.
Offers include those from Bharat Petroleum Corporation Limited (BPCL) and Mangalore Refinery Petrochemicals Ltd (MRPL).
However, Reliance Industries Limited (RIL), Nyara Energy, and Indian Oil Corporation stand as an exception as pet coke prices at these refineries have risen by over INR 500/t in line with the rise in prices of thermal coal which is used as an alternative to pet coke.
Why have BPCL and MRPL reduced pet coke prices?
BPCL has reduced its prices m-o-m by INR 2,632-4,472/t in Feb’22, while MRPL has reduced its rates by INR 280/t.
The sharp decline in BPCL prices comes due to its attempt to match its prices with that of RIL, which had raised its prices this month. The difference between the two companies now stands at INR 175/t.
The opposite trend between these two refineries indicates a time lag in capturing international price trends in domestic pricing by BPCL, market participants informed.
A sharp fall in BPCL prices, however, was limited due to the lower availability at the Bina refinery amid rising consumption at its captive power plant. The refinery has been offering about 20,000 t of pet coke per month in the market which was about 40,000 t per month prior to the commissioning of the captive power plant, sources said.
*Price in INR/t
*There is no road mode for Kochi at BPCL
MRPL has maintained the price difference of INR 300/t between its road and rake modes, which is the approximate expenditure incurred by a customer for shifting the material from the refinery to the rake/barge loading area.
*Price in INR/t
Why have RIL and Nayra Energy raised prices?
Reliance Energy Limited (RIL) has increased its February pet coke prices by INR 538/t m-o-m while another refinery, Nayra Energy, has raised the same by INR 545/t.
*Price in INR/t
The rise in RIL prices comes amid its major pet coke production getting redirected towards its gasification units, while it offered less quantity in the market for sale.
The consumption of pet coke at RIL’s gasification units has continued to increase since last year. Pet coke prices of Reliance Industries Limited (RIL) are generally considered the benchmark by major cement manufacturers, who are its major consumers. RIL is the largest producer of pet coke in the country having almost 50% share in production.
IOCL follows suit
Indian Oil Corporation Ltd (IOC), the country’s second-largest pet coke producer and market leader by domestic sales, has also increased its prices across refineries this month.
*Price in INR/t
At Indian Oil’s Panipat refinery, prices for northern states and general prices continue to remain the same.
Outlook
Pet coke demand in India has gained pace since Dec’21 and is likely to remain supported amid the volatile thermal coal market and with the government’s push towards construction activity.
However, domestic pet coke prices may also see further correction in the upcoming months as global thermal coal prices continue to remain elevated.
Leave a Reply