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Indian petroleum coke: Deals concluded in Indian market amid abundant supply

https://www.chemnet.com   Mar 06,2015 Platts
Some business was concluded this week in the Indian market for imported fuel-grade petcoke amid a deluge of offers, sources said.

India market sources said a leading cement company had recently bought two Panamax cargoes of US Gulf petcoke with 6.5% sulfur at around $74/mt CFR east coast India for end-March and April loading.

A west India-based cement company's source said his company had also bought a shipment of 80,000 mt of US petcoke with 6.5% sulfur at $74/mt CFR west coast for April loading.

This source said cement companies in India will buy US petcoke with 6-7% sulfur for between $71-$75/mt CFR.

There is oversupply on the Indian market and prices are under pressure, he said, adding that petcoke prices had to fall further because crude oil prices and seaborne coal market prices were falling.

A south India-based end-user source said that $74/mt CFR is the correct price for US petcoke with 6.5% sulfur.

While he was not buying any cargoes of fuel-grade petcoke anytime soon, he had received some offers, which to him shows there is an abundance of supply.

He added that with the onset of summer in India, petcoke production would increase as refineries produced more gasoline.

Dry bulk freight rates are also expected to remain under pressure which is another factor in lower petcoke prices, sources said.

CEMENT COMPANIES

More large cement making companies in India are located on the east coast and consume imported fuel-grade petcoke, a west India-based trader said.

On India's west coast there are other small end-users who also consume petcoke and would be keen to buy imported fuel-grade petcoke. He said offers for this grade were in the range of $77-$78/mt CFR, but buying interest was very low.

Another trading source agreed, and said his company had offered a Panamax cargo of US petcoke with 6-7% sulfur to an Indian end-user at $75/mt CFR but the end-user wanted to buy at a lower price. Buyers are looking at really low prices, he said.

Meanwhile, sources said a cement company on the east coast of India bought a Supramax of Saudi Arabian petcoke from the newly commissioned Yanbu refinery with around 6% sulfur at around $71/mt CFR. Currently, this refinery is using sweet crude so the sulfur content is low, sources said.

The west India-based cement company source said his company bought a Supramax of Saudi Arabian petcoke with 8% sulfur from the refinery in Jubail area at around $67/mt CFR west coast, which was being unloaded now. He said the Jubail refinery was offering around two cargoes of high sulfur petcoke a month.

He said that that the fair price for Saudi Arabian petcoke with 8% sulfur and above would be around $65-$66/mt CFR in the current market.

While Indian cement companies usually buy petcoke with sulfur below 7%, the cement company source said some companies with a "risk-taking appetite" could take advantage of this opportunity being provided by Saudi Arabian petcoke.

He added that USG petcoke would face competition from Saudi Arabian petcoke as more and more end-users would start buying Saudi Arabian material.
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