Petroleum coke (pet coke) import prices have remained mostly unchanged over the past week, although Indian buying interest has largely been subdued owing to exorbitant freight rates and competitively priced thermal coals.
The current average prices of US-origin pet coke (6.5% sulphur) are assessed at around $129-130 per tonne (t) on CNF India basis, compared to$127-129/t, an increase of $2/t week-on-week (w-o-w).
Offers for Saudi-origin pet coke (9% sulphur) are presently hovering at$ 125-126/t CNF India, as against the earlier price of around $124-125/t, an increase of $1/t w-o-w.
The U.S. Gulf Coast (USGC) FoB prices of pet coke (6% sulphur), widely accepted as the reference across international markets, have increased by $3/t to $78-79/t over $75-76/t prevailing a week ago.
Average shipping freight rates from USGC to Indian ports for Supramax vessels of 50,000-55,000 deadweight tonnes (DWT) are currently assessed at $47-48/t, compared to $45-46/t last week. Thus, there has been an increase of approximately $2/t w-o-w in ocean freight.
Pet coke imports nosedive on subdued buying interest
Indian imports of petroleum coke dipped 78% to 0.29 million tonnes (mn t) in Apr’21 as compared to 1.34 mn t in the corresponding month of last year. Further, on a month-to-month (m-o-m) basis, the country’s pet coke imports declined 48% last month, compared to 0.56 mn t in Mar’21.
This is understood to be primarily driven by reduced usage of high-priced pet coke and increased coal consumption in the fuel mix to manage cement makers’ costs.
Accordingly, the Indian market has been lately observing a considerable decrease in enquiries for seaborne pet coke, alongside lesser number of spot transactions other than existing long-term contracts.
Even as India’s major cement players wait for price corrections in the international pet coke market, not too much is expected in the short term because of tight availability in key source markets like the U.S. and Saudi Arabia.
Consumers switch to thermal coal as seaborne pet coke touches record high
The sharp increase in pet coke prices because of lower refinery run rates and supply uncertainty have forced cement companies to shift to thermal coal as a fuel and change their purchasing strategy.
India, the world’s second-largest cement producer, is also the biggest market for seaborne pet coke. But pet coke is gradually losing competitiveness against other alternatives like imported thermal coal because the Indian cement industry is switching to Australian high-calorific value (CV) and U.S. mid-CV coals, which are relatively cheaper.
Notably, imported thermal coals on a comparative heat-value basis from the above-mentioned origins are available to Indian cement producers at prices of $90-100/t against pet coke prices of $120-130/t.
Furthermore, as the availability of pet coke still remains constrained, any major price correction is not expected in the near future. Going forward, Indian market participants expect a further decrease in the country’s pet coke import volumes with consumers increasingly switching to thermal coal.
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