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Pet coke prices may soften on low India demand

The recent surge in steam coal prices in the global markets has led to a sharp firmness in pet coke prices, but a tapered demand from India, which has emerged as one of the biggest importers of the fuel in recent years, coupled with the expected softness in steam coal prices, may cause a softness in prices.

“The current price of imported pet coke is $85-87 per ton CFR India, but it may not sustain as fresh buying from Indian cement-makers is unlikely in the next 2-3 months as they are already booked till December,” said an official from a cement company.

Echoing the view, a second official said, “We are right now booked till the entire 2016 and so are in discussion with refiners and suppliers for sourcing pet coke in 2017. We will start negotiations in the next few days and plan to take about 100,000 tons per month of the imported material in 2017.”

A third official said that a large number of Indian traders of pet coke had participated in a recent conference in the US, which had created an impression that there was going to be significant demand for the fuel from India.

“A large number of Indian traders had participated in the conference and that created an impression that there is going to be good demand for pet coke from India. It is quite natural … a large crowd naturally gives an impression that there is big demand in India. Sellers naturally want to sell at a high price,” the third official said.

This official, however, pointed out that there was very low Chinese presence in the conference. China always wants a differential price as it wants to purchase at a low price as compared to the price at which Indians are buying, he said.

Price outlook:

Asked about his views on pet coke prices for 2017, the official said, “If you look at the current prices, these are almost at the top levels. From here, the possibility of prices going up is low, but they may rise by $2-4 per ton at best. After that, it is likely that the current high prices of coal will not sustain. In such a scenario, pet coke prices will continue to remain firm and after a certain level, users will again shift back to coal.”