MARKET TREND
Strong demand in the Petcoke market in India has continued to prevail. At the same time, the prospect of the prices of the refinery by-product not going up further also looms large.
During the last three months, the prices in India hovered at high rates; mainly driven by the higher international export offers arising due to supply tightness prevailed in the key international markets. Export availability was low in the US as refineries there were undergoing maintenance shut-downs.By now the maintenance shut-downs have reached the finishing stages, and the refineries in the US are gradually starting up—to ease the supply tightness in the days to come.
In India, the demand has been substantially strong as the user industries continued using Petcoke as the primary fuel. The supply tightness in the key international markets has forced the Indian buyers to procure from the home market. According to market participants, there was no inconsistency in the supplies by the domestic refineries. However, the Paradip refinery of the state-run Indian Oil Corporation Limited is still under maintenance shut-down, thus reducing the domestic supply by around 0.1 MnT.
Market participants have told CoalMint that Petcoke purchases in the markets of the country were strong, with all user industries procuring strongly. They also expected the strong demand to continue in the near future.
CONSUMPTION PATTERN
In Feb’18, the consumption of Petcoke in India was around 11.8% lower than that in Jan’18. The decline in the consumption in Feb’18 could be attributed to the reduction in the imports, which had arisen on account of supply tightness in the key international markets. The production in India also was around 13.3% lower in Feb’18 on month-on-month basis.
Source: CoalMint Research
The production in India in Feb’18 was at around 1.10 MnT and the imports were at around 0.46 MnT; thus accounting for a demand of around 1.56 MnT, which was lower than the demand of around 1.77 MnT in Jan’18.
PRICE TREND
The maintenance season of the refineries in the US has come to an end. Gradually, refineries there are resuming operations one after the other. And, with the resumption of the refinery operations, the offers also have drifted downwards.
The latest offer for Petcoke (6.5% Sulphur) from USA was reported at around USD 112/MT CFR India, down by around USD 4/MT over the week-ago offers. And the recent offer for Petcoke (9% Sulphur) from Saudi Arabia was reported down by around USD 4/MT, at around USD 108/MT CFR India, against the offers in the week last.
Source: CoalMint Research
The offers are expected to come down further as almost all the refineries in the US those were under maintenance will come back to operation within Apr’18. On the other hand, there has also been increase in the international demand for Petcoke. Apart from the consuming nations, such as India and China, other nations, like Japan, also have started actively importing the refinery-derived fuel—compounding to the international demand.
In the Indian context, the domestic ex-works prices are not expected to go up further. Given the drop in the international offers, there is a likelihood of the refineries in India slightly revising their prices downwards with the onset of the next month.
The prevailing ex-works prices of the major Indian refineries are: INR 8,950/MT (RIL), INR 8,935/MT (Essar) and INR 7,310/MT(MRPL).
Source: CoalMint Research
IMPORTS
During the 1-23Mar’18 period, around 343,821 MT of Petcoke was imported in India, data compiled by CoalMint Research shows.
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