Coal news and updates

High freight rates reduce number of imported pet coke deals

December 16: The recent rise in freight rates, which has significantly eroded margins of traders and refiners as buyers are not willing to pay the higher price, has led to a sharp reduction in materialisation of actual deals for pet coke (fuel grade) in international markets, industry sources said.

“High freights, along with uncertainty over China’s buying intentions in the short term and reports of some Turkish plants switching to coal following disturbances in Venezuela, are also putting pressure on the high sulphur (5.5% to 7.0%) market as fresh buying is not forth-coming,” they added.

There is uncertainty over whether China’s proposed import tax on high sulphur pet coke will be implemented even though China has not yet specified as to what would constitute high sulphur, they said.

Initial reports had indicated that China would implement the law from the beginning of January 2014.

Sources said, in the week ending December 13, there had been some deals for high sulphur pet coke out of US Gulf ports at $53.00 to $55.00 per ton FOB for loading in December in Supramax vessels.

Meanwhile, there had been some enquiries from Indian companies, but it was not clear whether any deal was concluded or not as Indian companies are awaiting commencement of supplies from Saudi Arabia in Q1 of 2014 and also the commissioning of a new refinery in Mangalore.

The price of mid-sulphur (4.5-5.0%) material was quoted at about $80 per ton FOB US Gulf.