Indian cement producers are back to using pet coke as a fuel for manufacturing amid elevated global thermal coal prices this year. The country’s pet coke imports in July 2022 stood at 0.89 mnt — the highest since January 2022. On a m-o-m basis, the same rose by 7% and has more than doubled compared to July 2021.
During the first seven months of 2022 (January-July), India’s pet coke imports have grown exponentially by 122% to 5.18 mnt against the same period last year.
Indian cement manufacturers that had been using high-CV Australian thermal coal since the past one-and-a-half years — because of its competitive rates — are back to booking pet coke especially after the Russian-Ukraine crisis.
The conflict between the two nations has pushed thermal coal prices to all-time highs. Western countries’ sanctions on Russia have increased demand for alternative Australian high-CV coal from European nations, driving up coal costs. This made Indian cement customers switch back to pet coke buying.
Import from Saudi Arabia being highest
Qty in mnt
Interestingly, Indian cement players are heard to be booking pet coke from non-traditional sourcing countries like Venezuela since the past two months. The reason is, the same is available cheaper by 10-15% against Saudi and US pet coke. However, any drastic rise in imports of pet coke from Venezuela was impossible amid limited loading and berthing capacity of the ports there.
Pet coke imports from Saudi Arabia in July 2022 increased by 500% y-o-y to 0.38 mnt from 0.06 mnt in July 2021. This was followed by the US at 0.34 mnt in this month.
Ultratech being the highest importer
India’s pet coke market scenario
Pet coke production for January-June, 2022 increased by 23% to 7.96 mnt y-o-y. This denotes a complete recovery from Covid-19, and domestic pet coke output may expand further depending on other aspects of the refineries’ product mix.
Pet coke prices ease
Imported pet coke prices into India have corrected downward by 15% since their highs in March 2022. Current prices of the Saudi-origin material (8.5% sulphur) is assessed at $190/tonne (t) while the US-origin (6.5% sulphur) is at $180/t, CFR India. In fact, the spread between Saudi and Venezuelan pet coke prices has also narrowed this month and the latter’s prices are also at $187/t CFR India basis.
Interestingly, Indian cement producers are also heard to be opting for Russian thermal coal because of its high GCV and low sulphur content.
Outlook
With the monsoon slated to taper off from next month onwards in India, construction activities are likely to resume and thus pet coke demand from the cement sector would gain strength. This, coupled with elevated thermal coal prices, will push up India’s pet coke imports further in the coming months.
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