The active Petcoke market in India has come under the influence of a sudden jolt. The Supreme Court of India has banned usage of Petcoke in Delhi/NCR and Rajasthan with effect from 1Nov’17. The ban was ordered due to the high levels of atmospheric pollution caused by burning Petcoke in industrial units as a result of the Sulphur constituent in the fuel.
The matter of the pollution caused by Petcoke usage in industrial units was taken up in the Supreme Court on 2May’17, when the court had directed the central government and the Central Pollution Control Board to fix the emission norms in respect to Sulphur Dioxide and Nitrous Oxide emissions for 34 types of industries operating in the regions within 30Jun’17. But, the emission standards were not fixed even after the deadline getting over. In this context, the court considered the matter as a negligence of the Ministry of Environment Forests & Climatic Change. Following which, the court took a tough stand, banning the usage of the fuel in the regions.
But, there is also an uncertainty in respect to the ban. The court order did not make it clear whether the ban encompasses even the industries equipped with anti-pollution mechanism. Market participants, spoken to by CoalMint, said that they expected the clarity within the next two-three days.
Expressing concern over the disruption to the user industries the ban will entail, the Faridabad Industries Association has apprised the Environment Minister of the grave consequences of the ban, which will clinch away jobs of around 25 lakh workers as around 5,000 industrial units in the regions will be closed down due to difficulty in switching over to alternate fuels in the very short intervening time.
Turning towards the market dynamics, there was no change in the global offers in comparison with those in the previous week. The latest offer for Petcoke (6.5% Sulphur) from USA has remained at around USD 110/MT CFR India; while, the recent offer for Petcoke (9% Sulphur) from Saudi Arabia has stayed at around USD 107/MT CFR India.
Source: CoalMint Research
There was also no change in the domestic ex-works prices in India.
Reliance Industries Limited (RIL), the largest Petcoke producer in India, has quoted its ex-works price at INR 8,100/MT, and Essar, the second largest producer has quoted its ex-works price at INR 8,090/MT.
Mangalore Refinery and Petrochemicals Limited (MRPL) has fixed its ex-works price at INR 6,360/MT.
Source: CoalMint Research
Given the gloomy scenario, alongwith the export supply resuming from USA and Saudi Arabia, the Indian Petcoke producers are expected to revise their ex-works prices downwards.
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