Indian-delivered prices for seaborne petroleum coke have continued to increase steadily on the back of a consistent demand recovery since July last year.
India’s domestically-produced pet coke prices have also firmed up consistently over the same period, following a steady resurgence in end-user demand from cement manufacturing companies.
The increasing price trend of imported pet coke is being observed from July onwards and is continuing in this month also. The firmness of price has more to do with the reduction in supply than increase in demand.
On the global front, pet coke supply still remains constrained owing to the aftereffects of the pandemic. This is leading to reduced demand for middle distillates, such as diesel and aviation fuel, thereby forcing refineries to curtail crude oil production and operate at lower capacities.
India’s pet coke imports decrease for fourth consecutive month in February
In line with rising international prices of pet coke, Indian imports of the fuel commodity have been following a consistent declining trend since November 2020.
Indian imports of pet coke have fallen by almost 57% month-on-month to 154,930 t in February from 358,935 t in January.
Price Assessments
The current average price of US-origin pet coke (6.5% sulphur) is assessed at around US$ 127-128 per tonne (t) on CNF India basis, compared with US$ 125-126/t in the last fortnight, this 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$ 122-123/t, resulting in an increase of US$ 3/t over the past two weeks.
The USGC FOB price of pet coke (6% sulphur) – widely accepted as reference across international markets – has decreased by US$ 2/t to US$ 73-74/t, over the price of US$ 75-76/t prevailing in the last fortnight.
Average shipping freight rates from USGC to Indian ports for Supramax vessel (50,000-55,000 tons deadweight (DWT)) are currently assessed at US$ 55/t, compared with US$ 51-52/t in the last fortnight. Thus, there has been an increase of approximately $7/t in ocean freight over the past two weeks, hitting the highest multiyear level yet again.
The steep spurt in sea freight is due to effect of Suez Canal blockade which was caused by one of the world’s largest container carriers ‘Ever Given’. This blocked more than 350 ships carrying containers, bulk cargos, oil and petroleum, which were passing through this important waterway. While the ship has now been successfully refloated and blockade has been cleared, traffic has resumed after almost a week. During this period many ships had to take a detour through South Africa.
Furthermore, another reason for pet coke price increase in the international market is its reduced availability due to lower production in the US, which is the major source of production of pet coke in the world. The domestic demand is strong due to increase in infrastructural activities which supports cement demand. These cement industries consume major portion of pet coke in their kilns. As the prices are at all-time highs, actual deals are limited and major consumers are waiting for price correction in the international market. But there appears to be no sign of correction at present.
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