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Petroleum coke: CFR India prices down over $1 on weak demand

The price of imported fuel grade petroleum coke delivered into India fell over $1 on the week with competitive offers from Saudi Arabia and weak demand.

Platts assessed the weekly 30-60 day prices of fuel-grade petroleum coke with 6.5% sulfur at $73/mt CFR India East, and $72/mt CFR India West, both down $1.25 from a week ago.

A south India-based end-user said offers of US Gulf Coast petcoke with 6.5% sulfur have outpaced demand.

According to him, cheaper Saudi Arabian cargoes "are a hit with Indian buyers", which is putting pressure on US petcoke prices.

A west India-based trader said his offer of US petcoke with 6.5% sulfur on a Supramax vessel is at around $74/mt CFR east coast India.

He pegged the Supramax freight rate from US Gulf to India at around $29/mt.

"Buyers are looking at high $60s/mt CFR, which is just not possible because FOB prices of this material have not come below $40/mt," he said, adding that Indian demand is not very strong as there are hardly any enquiries currently.

An end-user from west India also noted that US petcoke prices are falling because of competition from lower-priced Saudi petcoke.

"Demand from cement companies is not strong as most plants are running at 50%-60% of their capacities," he said.

He said offers of US petcoke with 6.5% sulfur were in in the low-$70s/mt CFR east coast India on Panamax vessel basis.

An east India-based trader source said he is currently negotiating to buy a Panamax cargo of Canadian petcoke with heating value of 7,200 kcal/kg NAR and 6.5% sulfur at $65/mt CFR west coast India.

He said the supplier has already come down to $66/mt CFR from the original offer of $70/mt CFR.

But the west India-based end-user said because of its lower calorific value, Canadian petcoke might not be as cost effective as US material.

Another west India-based trader said he was offering a Panamax shipment of US petcoke at $73-$74/mt CFR east coast India, but buyers were bidding at the mid-$60s/mt CFR.

A south India-based trader said early last week he heard a south India-based cement company reportedly closed a deal for a 50,000 mt shipment of US petcoke at $72-$73/mt CFR east coast India for October loading.

Another west India-based trader said he was getting offers for imported petcoke at Indian Rupee 5,400/mt ($81.37/mt) loaded on to trucks with all duties paid.

"Buyers can get any price they quote, but still they will think twice before buying. It is a bloodbath," he said.

Saudi petcoke is gaining popularity in India as prices are attractive, the first south India-based end-user said.

He said if prices remain at current levels he would also buy a Saudi petcoke cargo in the coming weeks instead of US material.

Offers for Saudi petcoke are at the high-$50s/mt CFR but deals are possible in the low-to-mid $50s/mt CFR, he added.

Sources said a leading cement company bought a Supramax cargo of Saudi petcoke with more than 8% sulfur at $56/mt CFR east coast India.

The west India-based end-user said his company had bought one cargo of Saudi petcoke recently on a trial basis, but did not give further details.

Meanwhile, sources said Essar Oil's four-week shut down of its refinery for maintenance in Vadinar in the western state of Gujarat starting this week is not expected to have a significant impact. Essar is the second largest fuel grade petcoke producer in India.

Sources said imported petcoke prices are much cheaper currently so it will impact only those buyers in the vicinity of the refinery.

source: http://www.platts.com