Domestic petroleum coke production registered a decline of 12% m-o-m to 1.25 milion tonnes (mnt) in Feb’22 as a sharp rise in prices resulted in lower demand by cement manufacturers, as per CoalMint data. On a y-o-y basis, the output rose sharply by 26%.
Production in Apr’21-Feb’22 was recorded at 13.34 mnt, up 22% y-o-y.
The growth in pet coke production seen from the start of the ongoing fiscal year indicates the improving construction activities since the outbreak of Covid-19.
However, the production, on m-o-m basis, declined following the 59% m-o-m rise in pet coke prices of US-origin with 6.5% sulphur currently at $270/t CNF India.
The Directorate-General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry allowed the imports of pet coke for only select industries such as cement, lime kilns, calcium carbide, and gasification industries.
Further, the annual import quota for raw petroleum coke is fixed at 1.4 mnt and aluminium industries will import 0.5 mnt of calcined petroleum coke, thus, limiting the overall import quantity.
Market sentiments
Because of the volatility in global thermal coal prices against the backdrop of the Russia-Ukraine war, the majority of cement manufacturers already shifted to pet coke since the beginning of this year.
However, the subsequent rise in pet coke prices further compelled them to take a backseat and await a correction in prices before making any major booking.
This resulted in limited pet coke purchases which stood at 1.4 mnt last month.
However, the ongoing peak construction season is expected to keep pet coke demand stable in the coming months as cement players tend to procure aggressively ahead of the monsoon season.
Short term outlook
Amidst the ongoing volatility in thermal coal prices, pet coke prices are expected to move higher, which may continue to weigh down the production volumes.
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