Companies like UltraTech and Shree Cement to benefit from falling pet coke prices
17 Feb 2016
Falling pet coke prices is expected to benefit a few largesized cement companies which have high exposure to it. Pet coke prices have fallen by almost 50 per cent to around $38 per tonne from $74 per tonne in August 2015. In the past three years, pet coke prices have fallen 60 per cent from close to $61 per tonne, according to analysts
Pet coke is one of derivatives of crude oil which is used to meet power and fuel needs of a cement plant. It forms 3040 per cent of power and fuel components of cement companies.
Typically, analysts estimate that 10 per cent fall in the prices of coal and coal equivalents like pet coke enhances the EBITDA per tonne of cement by almost 10 per cent.
Among the largesized companies, Shree Cement and UltraTech Cement are expected to benefit from this fall as they use multifuel cement plants. Shree Cement has been one of the first cement companies to use pet coke. Today, it runs almost all the plants on pet coke. UltraTech has increased its pet coke use by 50 per cent in comparison with past year.