India: RIL hikes pet coke prices for the 17th month in a row

Reliance Industries Ltd. (RIL) has increased petroleum coke prices to INR 20,781/t ex-Jamnagar, Gujarat compared to INR 16,360/t last month – a hike of INR 4,421/t.

Prices have been hiked with effect from 1 Nov. Notably, there have been price upticks every month from Jun’20 onwards, resulting in total increase of INR 15,084/t, or almost 265%, in the past 17 months.

Nayara Energy (erstwhile Essar Oil) also increased its pet coke price to INR 20,814/t ex-Vadinar refinery in Gujarat, over its last month’s price of INR 16,393/t, an increase of INR 4,421/t.

Meanwhile, Indian-delivered prices for seaborne petroleum coke have substantially increased over the past month. But, Indian demand has largely collapsed due to competitively priced thermal coals and exorbitant freight rates.

The current average price of US-origin pet coke, with 6.5% sulphur content, is assessed at $230-231/t on CNF India basis, as against the earlier price of $185-186/t, an increase of $44-45/t during the last month.

Offers for pet coke from Saudi Arabia, with 9% sulphur content, are presently assessed at around $240-241/t CNF India, up by $65-66/t compared with $174-175/t prevailing at the beginning of last month.

The US Gulf Coast (USGC) FoB prices of pet coke (6% sulphur), widely accepted as the reference across international markets, have increased to $148-150/t.

Average shipping freight rates from USGC to Indian ports for Supramax vessels of 50,000-55,000 deadweight tonnes (DWT) are currently assessed at $80/t, an increase of $16/t.

This consistent price rise is mainly due to restricted availability of pet coke in the international market. It is also supported by demand for pet coke by cement manufacturers for road construction and other infrastructural projects. Even though domestic production of pet coke has gradually increased, it is still lower than optimum levels.

Furthermore, lower availability of pet coke in the international market has pushed up prices. There is also a spurt in the prices of imported steam coal, which is primarily used as a substitute for pet coke by cement makers.