Petroleum coke (pet coke) import prices have shown slight upward movements over the past fortnight, but are expected to cool off as Indian buying remains lacklustre due to high freight rates and the worsening Covid-19 scenario.
The current average price of US-origin pet coke (6.5% sulphur) is assessed at around US$ 129-130 per tonne (t) on CNF India basis, compared with US$ 127-129/t, indicating an increase of US$ 2/t over the past two-week period.
Offers for Saudi-origin pet coke (9% sulphur) are presently hovering in the range of US$ 125-126/t CNF India, as against the earlier price of around US$ 124-125/t, resulting in an increase of US$ 1/t over the past two weeks.
The US Gulf Coast (USGC) FoB price of pet coke (6% sulphur), widely accepted as the reference across international markets, has increased by US$ 3/t to US$ 78-79/t, over US$ 75-76/t prevailing over the last fortnight.
Average shipping freight rates from USGC to Indian ports for Supramax vessels (50,000-55,000 deadweight tonnes(DWT) are currently assessed at US$ 47-48/t, compared to US$ 45-46/t in the last fortnight.
Thus, there has been an increase of approximately $2/t in ocean freight over the past two weeks.
Pet coke imports to decrease amidst weak demand from cement manufacturers
Notably, this is the first sign of prices cooling off, which had a long run-up from July’20 onwards and continued till recently. The correction is attributed to limited deals at the peak levels as these prices were not viable against other alternatives like imported thermal coals such as South African RB2 and US mid-CV coal.
However, as the availability of pet coke still remains restricted, any major correction is not expected in the near future. This is also supported by strong domestic demand for pet coke by cement industries in India due to increased infrastructural activities. But, with the recent implementation of Covid-related lockdowns and ‘Break the Chain’ guidelines by various state governments, cement production may decrease, which may lead to lower demand for pet coke in the near term.
Going forward, market sources expect a further rise in volumes due to less competitively priced pet coke, which has seen consumers switching to thermal coal.
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