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Wide bid-offer spread deters deals in India petroleum coke market

A wide bid-offer spread is deterring deals in the Indian market for imported fuel grade petroleum coke, sources said this week.

A west India-based trader source said offers for US Gulf petcoke with 6%-7% sulfur were at about $80/mt CFR west coast India and at about $81/mt CFR east coast India on Supramax vessel basis but buying expectations were in the mid-$70s/mt CFR.

He said freight rates continued to hold firm despite a downtrend in crude oil prices as grain movement from the US had picked up. He pegged the FOB price of US Gulf petcoke with 6%-7% sulfur at around $51-$52/mt.

This trader said a deal was reportedly concluded this week for a Supramax cargo of US petcoke with a calorific value of 7,500 kcal/kg NAR and 6.5% sulfur at about $77/mt CFR levels west coast India for August loading. Platts could not immediately verify this deal.

ound $82/mt CFR west coast and $83/mt CFR east coast Supramax basis, but bids were at around $77-$78/mt CFR.

"When (Supramax) freight is at around $32/mt (from US Gulf to India) and FOB is at around $51/mt, it is not possible to deliver at such low prices," he said referring to the bid prices.

He added that there were only one or two enquiries in the market as buyers waited for prices to soften.

A north India-based end-user said apart from "very high" offer prices, transporting petcoke from ports to end-user plants is also difficult as railway rakes are not available and so buyers prefer domestic Indian petcoke.

Meanwhile, sources said Saudi petcoke with more than 8% sulfur was competing with the US material.

Another south India-based trader said end-users would have to make a one-time investment for desulfurisation and they will be getting almost similar calorific value to that of US material at a much lower price and at a much quicker pace.

While sailing time from the US Gulf to India is around 40-45 days, that from from Saudi Arabia is just about a week.

A third south India-based trader said that he had offered an August loading Supramax cargo of Saudi petcoke with about 9% sulfur at around $65/mt CFR west coast India but the buyer was asking for low-$60s/mt CFR west coast.

The west India-based trader said Saudi petcoke is being sold to Indian buyers in the range of $64-$67/mt CFR.

The third south India-based trader said he had also heard of Russian petcoke being offered in the Indian market at around $78/mt CFR, but he could not give more details.

Platts assessed the weekly 30-60 day prices of fuel-grade petroleum coke with 6.5% sulfur at $78.25/mt CFR India East and $77.25/mt CFR India West, both down $1 from a week ago.

source: http://www.platts.com