Pet Coke Offers Undergo a Downturn by USD 3-4/MT India

Constant fall in Saudi Arabian Petroleum coke prices makes Indian importers shift interest towards Middle East, away from conventional sources of the material ie US and Canada.

Imported petroleum coke, highly preferred in Indian cement and ferro industry, is under pressure. Pet coke prices experienced a fall of about USD 3-4/MT this week on the grounds of increasing supply from Middle East, coupled with falling crude oil prices, which declined to USD 40.5/barrel on Wednesday. On the other hand, devaluating currency markets have restricted importers from heavy imports. However, Indian buyers are at an advantageous position, who are now looking for cheaper material from different sources.

At present Saudi Arabian Pet coke is being very competitive to US material. Saudi Arabian 7800 GCV with 8% sulphur content is being offered at about USD 58-60/MT CIF basis, whereas US Pet coke, bearing sulphur content of 6.5% is assessed at USD 76-77/MT CIF West Coast India. Meanwhile, Canada’s 8100 GCV Pet coke having sulphur content of 7% is assessed at USD 71-72/MT CIF basis.

Indian importers conventionally prefer US based Pet coke, but increased availability of the substance at lower offers from Middle East has made it a preferred option for Indian buyers. Saudi Arabia has recently started a new Pet coke plant which has raised supply in the global market.

[su_quote]“Indian importers prefer petroleum coke from Middle East owing to lower cost. Low freight rates from Middle East are also being supportive to buyers .” according to a market participant.[/su_quote]

The Indian cement industry is experiencing a slowdown, resulting in most plants running below capacity. As such the shift of interest towards new cheaper sources is natural, since buying Pet coke at high prices from conventional sources is making production unviable for cement manufacturers.

Pet Coke Import from Saudi Arabia in FY15 & FY16

Currently, India has been increasing its Pet coke imports from Middle East, which has supplied about 0.4 MnT Pet coke in Apr’15-July’15. Import was about 0.2 MnT during the same period in FY15. The country imports about 50% of Pet coke from US every year and rest of the quantity is shipped from different destinations.

Quantity in 000’ MT
Source: SteelMint

India’s Pet Coke Import Scenario

India, one of the major global Pet coke importers, has increased its Pet coke imports in this financial year (Apr’15-July’15) by about 61% compared to same period of last fiscal. The country’s Pet coke import reached 5.8 MnT in FY15, which was about 2.7 MnT in FY14. In the current fiscal, country’s imports are expected to increase further on the grounds of increased supply and globally falling prices.