Pet coke imports jump 2-fold by mid-July amid high thermal coal prices and reduced availability from Australia.
The elevated global thermal coal prices this year have impelled Indian cement manufacturers to switch back to pet coke as a fuel for production. CoalMint data shows that between 1-12 July’22, 0.40 million tonnes (mnt) of pet coke are expected to arrive at Indian ports, just double of what had been received in the entire month of July last year. During January-May, 2022, India’s pet coke imports have an exponential growth of 116% against the same period last year, as per customs data.
Qty in mnt
Another factor that has forced cement players to switch back to pet coke is the reduced availability of its close substitute, high-calorific value (CV) Australian thermal coal, this year.
When China had announced its unofficial ban on Australian coal imports in the latter half of 2020, prices of the same had fallen drastically because China had a substantial share (25-30%) in Australia’s coal exports. Now, with excess coal being available from Australia at cheaper rates, Indian cement buyers had a gala time using high-CV, low-sulphur, cost competitive Australian coal as fuel.
However, this year has been different. The Russia-Ukraine conflict has forced coal prices to touch new highs. Sanctions on Russia by western countries have resulted in a demand surge for alternate Australian high-CV coal from European countries, resulting in its price rise. The changed dynamics in the coal trade have made Indian cement buyers switch back to pet coke.
Highest imports coming from the US
Interestingly, the US’ share in India’s pet coke imports have increased this year. In fact, out of 0.40 mnt coming in by mid-July, 75% is from the US.
Qty in mnt
Interestingly, Indian importers are also exploring options to bring in pet coke from Venezuela, which is cheaper than the US material by $5-10/t. Venezuelan coke is heard to be of good quality because of its lower sulphur content. However, there are loading constraints at Venezuelan ports because of lesser berthing facilities which is why Indian buyers have to plan much ahead for importing pet coke from this country.
Outlook
The monsoon is a lean period for the cement sector in terms of demand and buyers are well stocked to avoid production disruptions. Thus, it is likely that India’s pet coke imports may see a fall in the near-term.
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