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Indian refiners cut pet coke prices to counter imports

In an attempt to control or restrict the usage of imported pet coke, Indian refiners have resorted to sharp cuts in prices during the past three months in order to retain their customer bases.

That the domestic refineries were holding huge inventories in the wake of the overall sluggishness in the Indian economy and low growth in big consuming sectors like cement also prompted them to cut prices.

Reliance Industries Ltd (RIL), the biggest producer of pet coke in India, had cut prices by Rs 1,500 per ton in November 2015, by Rs 200 per ton in December and by another Rs 200 per ton for delivery in January 2016 to match their prices with that of the imported material.

Even other refineries like Essar, IOC and MRPL have resorted to price cuts to match the rates offered by RIL.

According to information available with ICMW, RIL had an inventory of about 170,000-180,000 tons while Essar had over 100,000 tons of inventory. Even Indian Oil Corporation had stocks of about 70,000 tons at its Panipat unit and some at its Koyali unit.

“All refineries have priced their material at import parity price prompting even those consumers who were buying the imported material to switch to domestic sources,” a trader said.

“As a result, there is practically no buyer of imported pet coke in India, except some companies in southern India who are still buying small consignments of Saudi Arabian pet coke,” he said.

Even companies like Shree Cement, who used to import big quantities of pet coke from the US Gulf Coast earlier and Saudi Arabia in recent times, are buying domestic material from Reliance and Essar, the source added.