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Petroleum coke: High delivered prices keep Indian buyers at bay

The Indian market for imported fuel grade petroleum coke remained largely lackluster this week amid high delivered prices, with dry bulk freight rates remaining firm, sources said.

A north India-based trader said there was a huge mismatch in the price expectations of buyers and suppliers for US Gulf petcoke with 6%-7% sulfur.

While Supramax cargoes were offered at around $80/mt CFR east coast India, buyers were bidding $77-$78/mt CFR, the trader said.

With freight rates still going strong, Supramax cargoes from US Gulf with 6.5% sulfur would cost around $79-$80/mt CFR, he said.

However, he said he had not heard of any deals in recent days.

High freight rates have pushed delivered-India prices up to $82/mt CFR but there is no demand at these levels, a west India-based trader said.

"There is a slowdown in demand, which started last month due to high freight rates," he said.

FOB prices for US Gulf petcoke with 6%-7% sulfur have been around $50-$51/mt while Supramax freight rates are hovering around $31-$32/mt, he said.

Last week, a 50,000 mt Supramax vessel was heard fixed at $33/mt for a mid-August loading petcoke cargo from the US Gulf to the west coast of India at $33/mt, shipping sources said.

The north India-based trader predicted demand would be subdued in August and September too if freight rates remain at higher levels.

However, there may be some buying interest if cement demand improves, he said, adding that in the current market, buyers are finding domestic petcoke more competitive than imported material.

Another north India-based trader said the cement industry is experiencing a slowdown, with most plants running below capacity, so buying petcoke at current offer prices do not make economic sense.

He had also offered a Supramax cargo of US petcoke with 6.5% sulfur to a leading cement firm at $79/mt CFR east coast India, but the company found the offer "too high" and eventually the deal did not go through.

Meanwhile, a north India-based end-user said the market was "quiet" as most end-users were either covered through September or were staying away due to high CFR prices.

The first north India-based trader said a couple of Russian refineries are also looking to India to sell petcoke with around 5% sulfur, but pricing is still being worked out.

There were no deals reported for Saudi petcoke too this week, sources said.

A south India-based trader source said he was negotiating a deal for Saudi petcoke with above 8% sulfur for August loading but the end-user's price expectation was $62-$63/mt CFR east coast India, while offers were in the high-$60s/mt CFR, he said.

Platts assessed weekly 30-60 day prices of fuel-grade petroleum coke with 6.5% sulfur at $79.25/mt CFR India East and $78.25/mt CFR India West, both unchanged week on week.

source: http://www.platts.com