Indian Refineries Likely to Raise Petcoke Prices w.e.f Mar’18

MARKET TREND

There has been no change in the Petcoke market dynamics in India during the last seven days. Strong demand amid high prices prevailed without a slightest hint of any downturn in the demand pattern in the near future.Purchases have been strong with all segments of end-users procuring the material for the daily production needs.

Moreover, there was no domestic supply constraint heard of as the refineries in India were learnt to have had released supplies on a regular basis.

According to an analysis on the latest production and import data, demand for Petcoke was calculated to have declined by around 22.7% in Jan’18 over the demand in Dec’17. The decline was due to the uncertainty prevailed due to the prospect of the Supreme Court in India calling for a complete ban on the usage of the fuel in India—which however did not happen.

Source: CoalMint Research

In Jan’18, Petcoke production in India was almost at the same level as in Dec’18, albeit a slight upward drift.

PRICE TREND

Domestic prices as well as international offers have remained at highs. Strong international demand has prevented any decline in the global offers. Of late, Petcoke consumption in China has started escalating, accounting for the strong export demand in the key international markets. Some importers also said that there was unavailability of export cargos.

The latest offer for Petcoke (6.5% Sulphur) from USA was assessed at around USD 116/MT CFR India, a decline of around USD 2/MT over the week-ago offer. The recent offer for Petcoke (9% Sulphur) from Saudi Arabia was assessed higher by around USD 2/MT at around USD 110/MT against the offers in the week last.

Source: CoalMint Research

The escalating international offers also indicate about the possibility of the Indian refineries revising their ex-works prices further upwards with the onset of Mar’18.

The prevailing ex-works prices in India are at: INR 8,350/MT (Reliance Industries Limited), INR 8,335/MT (Essar) and INR 6,870/MT (Mangalore Refinery and Petrochemicals Limited).

IMPORTS

During the 1-23Feb’18 period, only around 0.33 MnT of Petcoke imports had landed at Indian ports, data compiled by CoalMint Research shows. As a result of the imposition of the 10% Import Duty, the imports have fallen as buyers now prefer purchasing more from the domestic market.