Domestic Pet Coke Prices Revised; Import Offers Unchanged

Reliance Industries Limited (RIL) has revised its petroleum coke price to INR 8,850/MT with effect from 1 Jan’19, which is an increase of INR 300/MT over its previous price of INR 8,550/MT (as from 1 Dec’18).

Similarly, Nayara Energy (erstwhile Essar Oil) has revised pet coke price w.e.f. 1 Jan’19 to INR 8,840/MT, which is higher by INR 300/MT as compared to its last month’s price of INR 8,540/MT.

Mangalore Refinery & Petrochemicals Ltd. (MRPL) has also revised pet coke price w.e.f. 1 Jan’19 to INR 7,710/MT for road supplies against its last month’s price of INR 7,880/MT. Price for rake/barge supplies is INR 7,410/MT against its last month’s price of INR 7,580/MT. Thus, there is reduction of INR 170/MT over MRPL’s last prices in Dec’18.

Price Commentaries

The price increase by RIL, India’s largest producer of pet coke which contributes over 45% of domestic production, reflects the firming up of pet coke prices in the international market. Further, the domestic demand has gradually recovered due to a resurgence of interest by cement companies. The consumption in gasification units of RIL has also increased after stabilization of units, leaving lower availability for open domestic market.

Notably, RIL had reduced its domestic pet coke price in the last two months, by INR 300/MT in Nov’18 and by INR 800/MT in Dec’18. RIL’s trend reversal is expected to be broadly followed by other companies in their price revisions.

Nayara Energy typically follows the RIL price and generally maintains a difference of INR 10/MT with respect to RIL. Hence, its price increase is by the same amount of INR 300/MT as RIL.

However, the reduction in pet coke price by MRPL – against the price increase by RIL – indicates disparity in price, supply and demand on regional basis. This is also due to different local situations and varying inventory positions at various refineries.

MRPL price for rake/barge supplies is lower by INR 300/MT than road supplies, which is the estimated expenditure incurred by the customers to shift the product from refinery for rake/barge loading.

IOCL, the second-largest producer of pet coke, is yet to revise its price from various refineries. It is expected that forthcoming price revision by IOCL may also involve a price increase like RIL.