Indian Petcoke Prices Stable, More Bitter News Likely

The Petcoke users in India have received another jolt—the Supreme Court extending its Petcoke ban to the entire states of Uttar Pradesh, Haryana and Rajasthan, after imposing the ban in Delhi/NCR with effect from 1Nov’17. In a bitter note, there is a talk surfaced in the Indian market that the Government of India is contemplating banning imports of the fuel.

The extension of the ban to Rajasthan has directly impacted the cement manufacturers as several cement plants are situated at the state, which bears 12% of the country’s overall lime reserves—a critical input for cement production.

Several cement makers are learnt to be readying themselves for appealing against the Supreme Court order, citing that the ban will impact their profitability. According to them, power as well as fuel costs will shoot up by 10-15% on account of the ban.

The following table shows the Petcoke usage pattern in some cement companies:

Source: CoalMint Research 

Nevertheless, there was no change in the either the domestic Petcoke prices or the international offers on a week-on-week basis.

The ruling offers for Petcoke(6.5% Sulphur) from USA are assessed stable at around USD 106/MT CFR India; while that for Petcoke (9% Sulphur) from Saudi Arabia are also assessed unmoved at around USD 98/MT CFR India.

Source:  CoalMint Research

Reliance Industries Limited (RIL), the largest Petcoke producer in India, has quoted its ex-works price at INR 8,100/MT, and Essar, the second largest producer has quoted its ex-works price at INR 8,090/MT. Mangalore Refinery and Petrochemicals Limited (MRPL) has priced its Petcoke at INR 6,950/MT (ex-works).

Source: CoalMint Research

Imports of the fuel have dwindled significantly on account of the ban in place. During 1-17Nov’17, only 163,650 MT of Petcoke was imported in India, according to the data compiled by CoalMint Research.