Petcoke trade muted: Indian buyers battle weak cement sector demand, favour cheap thermal coal

• Indian buyers resist high offers amid weak cement sector demand
• Costlier petcoke pushes buyers toward cheaper high-CV thermal coal

The Indian imported petcoke market experienced a week of downward price pressure and limited trade activity. The primary theme was a significant standoff between buyers and sellers, driven by high offers from suppliers due to renewed Chinese demand and rising freight costs, which were firmly rejected by Indian buyers facing weak domestic demand and exploring cheaper alternative fuels like high-CV thermal coal. The CFR India assessment fell to $115.50/mt, down $1.50/mt week-on-week.

Prices & market trends

Sentiment: Bearish for buyers, with a wide bid-offer gap preventing deals.
Demand: Weak demand from Indian cement plants, operating at only 70-75% of capacity, coupled with high seller offers.
Alternative fuels: Buyers actively sought high-CV thermal coal from South Africa and US Northern Appalachian (NAPP) coal as cheaper substitutes. US NAPP coal is available portside at Kandla/Tuna at INR 9,875 + GST which is equivalent to about $102-103 CFR, whilst fresh offers of US NAPP coal are at $112-113 CFR India whilst current bids are about$108-109 CFR.

• No confirmed trades were reported in the Indian market during this period.
• A consistent bid-offer gap of ~$6-9/mt persisted throughout the week, making deals impossible.
• Bids clustered in the $110-$117/mt range, while offers were firmly in the $117-$121/t range.

Market drivers

Weak cement sector: Demand remains muted as the post-monsoon construction pickup has been slower than expected. Cement plants are operating well below capacity.
Buyer resistance: Indian buyers are refusing to meet elevated offers, choosing to delay purchases in anticipation of a future price drop.
Fuel switching: The high cost of petcoke is making alternative fuels, particularly high-CV South African thermal coal and US NAPP coal, economically attractive for cement and other industries.

Chinese competition: A key factor inflating seller offers is the surge in demand from China, which is outbidding the Indian market for US-origin petcoke.
Rising freight costs: Freight rates from the US Gulf Coast to India’s East Coast rose for the third consecutive week, assessed at $47.50/mt, adding to the landed cost.
Domestic availability: Robust domestic petcoke production in India is also reducing the urgency for imports.

Outlook

Market participants expect demand to rise in the coming weeks as the January-March quarter is traditionally strong for construction. However, for deals to materialise, either Indian buyers will need to raise their bids or global pressures must ease, allowing sellers to lower their offers. An increase in supply from Saudi Arabian refineries resuming operations could also help rebalance the market.