The Chinese market has dominated seaborne coke trade over much of the last three years, but that could be set to change in 2023.
China's economy has faltered in recent months, particularly for key coke-consuming industries like glass, cement and metals, with real estate investment slowing. Stimulus measures and the relaxation of the country's zero-Covid policy could spur new growth, but the outlook remains muddier than in recent years.
Weakening petroleum coke demand in China in 2023 could redirect more coke to other countries, particularly India. But coke could have more competition from coal than it did for much of this year, after disruption to the global energy markets, especially from the Russia-Ukraine war, led to elevated coal prices in many markets.
At the same time, US Gulf high-sulphur coke production is expected to grow in the coming year, further pressuring sellers to find more buyers outside of China.
Currently, China remains the biggest green coke importer, having taken around 13.62mn t, or just under 30pc of the world's seaborne green coke, in January-November, according to data compiled by Global Trade Tracker (GTT). This compares with 11.73mn t in January-November 2021, or a little under 28pc. Many countries have not yet reported November imports, which could adjust its market share for 2022. But China certainly dominated global demand in November, as its monthly imports reached more than 1.94mn t, a record high monthly total for any country, surpassing India's 1.9mn t in August 2016.
For full-year 2021, China took 26.8pc of global seaborne coke imports at 12.52mn t, a far higher proportion than any country, with a number of countries all splitting comparable market share. Japan took 9pc with 4.2mn t, India 8.6pc with 4mn t, Mexico 8.3pc with 3.9mn t and Brazil took 7.6pc with 3.6mn t. Turkey had the next largest market share at 4.5pc with 2.1mn t.
This was a change from 2020, when China was the largest importer but was followed much more closely by India. China took 20.6pc of 2020's seaborne coke imports at 10.1mn t, with India at its heels taking 9.6mn t, or 19.5pc. And in 2019, China took 15.7pc at 8mn t, behind India at 21.1pc with 10.8mn t. If Chinese demand returns to 2019 levels, India would be the most likely destination for sellers to target.
India had previously dominated the market for a period as its large cement industry appreciates the high-calorific value of fuel-grade high-sulphur petroleum coke. But the Covid-19 pandemic turned market fundamentals on their head, driving coke to a wide premium to coal, which quickly stifled Indian demand in the second half of 2020 and 2021. When coke supply recovery and historically high coal prices revived coke's discount in 2022, Indian demand surged back. Imports to the country more than doubled on the year in the first 10 months of 2022, reaching 7.4mn t, or 16.1pc of total seaborne market share — up by roughly 10pc from a year earlier.
Indian buyers will likely absorb much of the coke that can no longer find a home in the Chinese market if China's buying falls back from recent record levels. But only if the discount to coal remains favourable. Availability of cheap Russian coal — as well as the possible decline in prices for other coal origins from their record highs — may also pressure demand for coke in Asia-Pacific next year.
