PdV ships petroleum coke to Cuba

Spanish Market: Petroleum coke
27/11/19

Venezuela's state-owned PdV is shipping petroleum coke to Cuba to reduce stockpiles of the oil byproduct at the 940,000 b/d CRP refining complex in Falcon state, according to multiple company officials.

The Malta-flagged bulk carrier Lagonda departed from the 305,000 b/d Cardon refinery's terminal on 24 November bound for Cienfuegos in Cuba carrying 26,000 metric tons of coke, the officials said.

A bill of lading dated 23 November seen by Argus values the shipment at $1.7mn with Cienfuegos as the final destination. The buyer is listed as Cuba's state-owned oil company Cupet.

PdV officials at the CRP complex said the cargo officially earmarked for delivery at Cienfuegos is intended to circumvent US sanctions against Venezuela and likely will be re-exported from Cuba either to Portugal, Italy, Spain or Turkey where PdV has shipped coke in previous years.

PdV plans to continue shipping coke to Cuba, the officials said. But it is unclear if these shipments will generate any cash revenue for PdV.

The coke shipment comes on the heels of a wave of PdV oil shipments to the island in October and early November, a move that enabled PdV to clear out a backlog of crude that the company was unable to market largely because of US sanctions.

PdV's shipments to Cuba are invoiced under longstanding bilateral agreements in place since 2000 between Caracas and Havana that mandate delivery of Venezuelan crude oil and oil products as payment for the deployment of Cuban advisers in a range of areas, including security.

In recent months, the US government has expanded its Venezuela sanctions onto Cuba, which is already the target of US economic sanctions for nearly six decades.

PdV has been trying for several years to reduce stocks of up to 15mn tons of coke accumulated mainly at its Jose oil processing and terminal complex in Anzoategui state. Smaller volumes of coke are also stockpiled at the CRP complex, the officials said.

At least three contracts signed since 2016 with operators in Italy and Turkey to refurbish coke handling systems and reduce stocks have made little if any progress, oil ministry and PdV officials acknowledge.

Coke, a byproduct of upgrading tar-like Orinoco oil into lighter crude, has accumulated quickly at Jose since a 2009 fire temporarily halted exports. Mammoth coke dunes at Jose have drawn criticism from environmentalists and nearby communities.

The CRP, which includes the Cardon refinery and nearby 635,000 b/d Amuay refinery, currently is operating at about 11pc of its nameplate capacity, the officials added.

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31/12/24

Viewpoint: Trade war may upend US coke prospects

Houston, 31 December (Argus) — A possible renewed and expanded global trade war in president-elect Donald Trump's second term could lead to retaliatory tariffs from the US' major petroleum coke export destinations, pressuring US Gulf coast coke prices and adjusting trade flows. Trump campaigned on plans to impose tariffs of up to 60pc on imports from China , reviving memories of his trade policies in 2018 and 2019 that chilled coke trade with the country. He has also threatened to add 25pc tariffs on imports from Canada and Mexico, and up to 20pc on imports from all other countries. It is far from certain Trump will follow through on all his tariff threats once he does take office, or that they will be as large as he has promised. But if he does, China could repeat its retaliatory response to the prior Trump tariffs. And if other countries join in on those retaliatory measures, US coke exporters could face even more challenging conditions than in the past. First term fight In June 2018, the Trump administration announced plans for a 25pc tariff on what was then $34bn/yr of Chinese imports. Later that month Beijing retaliated, announcing a punitive 25pc tariff on US exports of fuel and calcined coke, thermal and coking coal and many other products. Total tariffs on greater-than-3pc-sulphur green coke, the US' largest grade exported to China, ultimately reached 33pc. The dueling tariffs led to significant shifts in US Gulf high-sulphur coke markets. Green coke exports from the US Gulf coast to China dropped by nearly 60pc year over year in 2018 to 638,000t, according to Global Trade Tracker (GTT) data, as no US Gulf coke shipments loaded for China from July-October. US Gulf export volumes to China stayed nearly flat in 2019 before surging back to 1.8mn in 2020 after China began issuing exemptions for its green coke tariff . US Gulf high-sulphur coke prices also started to fall sharply late in the third quarter of 2018 after China's retaliatory tariff came into effect in late August , while Indian and Turkish demand also fell. The average price of US Gulf 6.5pc sulphur coke dropped significantly in 2019, down by $27/t year over year. US coke exports to other countries were also hurt during that time. Turkey imposed a tariff on US-origin coke imports in 2018 after Trump doubled tariffs on Turkish steel and aluminium imports. US Gulf coke exports to Turkey fell by almost 50pc in 2019 compared with the year prior. Although some analysts think it is unlikely China will retaliate to tariffs as aggressively as it did during the first Trump term, Beijing would likely still target select industries. Coke could be high on this list, as these tariffs are still officially in effect and the government could easily withdraw the exemptions it has issued since 2020. A wider battlefront Trump's threat to issue tariffs against other countries in his second term, including 25pc tariffs on imports from top US trading partners Mexico and Canada, could lead to even more challenges. Already, Canadian prime minister Justin Trudeau and Mexican president Claudia Sheinbaum have indicated that they could retaliate if the US goes through with Trump's plans. While Canada has only taken about 800,000 t/yr of US coke since 2021, Mexico has been a large consumer. The US' southern neighbor has been the fourth-largest offtaker of US Gulf coast coke so far this year. It was the largest in 2018 and 2021 and second-largest in 2019 and 2020, helping to absorb some of the lost demand from China, alongside India, Brazil, Turkey and Italy. India has typically been the biggest offtaker of US Gulf coke in recent years, and it has increased its share of US Gulf exports to 24pc in January-October of this year from 14pc in 2022. This step-up in US coke shipments to India followed a significant drop in China's higher-sulphur fuel coke demand over the past two years, especially since the government began signaling in late May that it would limit its consumption , as well as an increase in Indian cement makers' use of coke in their kilns . While India is likely to absorb even more US Gulf coke if Chinese demand declines further, India already took 20pc more of this coke in 2023 than it did in 2019. This suggests that new buyers may have to come into the market for the potential overhang in next year's US Gulf coast supplies to be worked down. This will only occur if US coke remains at a wide discount to coals from countries like South Africa, Australia and Indonesia in order to encourage more coal consumers to make the switch to coke. If a wider trade war results in India implementing tariffs on US coke, sellers might prefer to sell to other destinations, particularly in the Atlantic basin, rather than discounting coke deeply enough to draw more Indian demand. No help from Europe But while European countries like Italy, Spain, France and Greece were top importers of US Gulf coke in 2018 and 2019 when Chinese demand dropped, these countries are not as well-positioned to absorb more coke now. Cement makers in the region have invested in alternative fuels over the last few years as the EU Emissions Trading System has increased the price of carbon emissions, lowering their overall appetite for fossil fuels. The US exported 31pc less coke to Europe in 2023, at 4.4mn t, than it did in 2018, at 6.4mn t. By Hadley Medlock and Lauren Masterson Top USGC coke export destinations 2017-2020 mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Policy uncertainty dogs battery anode plans

30/12/24

Viewpoint: Policy uncertainty dogs battery anode plans

Washington, 30 December (Argus) — Former president Donald Trump's re-election is sparking uncertainty in the US' synthetic graphite battery sector, with companies worried about a possible halt to government finance and a weaker outlook for domestic demand. "With Trump being elected president, everything's up in the air," one industry source said. Battery materials companies expecting to receive government funding to build plants in the US could see their prospects dim with Trump coming into office , since these companies need the federal grants to compete with China, a second source said. Trump on the campaign trail said he would rescind all unspent funds in President Joe Biden's Inflation Reduction Act (IRA) and scrap Environmental Protection Agency tailpipe standards, which he called an electric vehicle (EV) "mandate". The Biden administration is racing to try and secure projects set to be funded by the IRA. On 16 December, US battery materials producer Novonix received a conditional loan for up to $754mn for a new synthetic graphite plant from the US Department of Energy (DOE). If finalised, the loan would be used to build a new 31,500 t/yr synthetic graphite plant in Tennessee by the end of 2028. DOE previously awarded Novonix a $100mn grant and a $103mn tax credit to expand capacity at its Tennessee plant to 40,000 t/yr by 2025 and 150,000 t/yr by 2030. DOE on 16 December also closed on its up to $9.6bn loan to South Korean battery manufacturer SK On for the construction of three battery plants in the US, the largest loan ever awarded under its Advanced Technology Vehicles Manufacturing Program. DOE also in September selected SKI US , part of India-based Birla Carbon, to receive $150mn build a 25,000 t/yr synthetic graphite production plant in South Carolina. Some in Trump's orbit have warned they will review contracts they view as hastily pushed out before the former president takes office . But some Republicans are likely to oppose full repeal of the IRA, since the bill funds projects in their districts. And Republicans will hold a razor-thin majority in the House of Representatives. Even if Republicans do not repeal the IRA or other EV subsidies like tax credits, the uncertainty surrounding the new administration's support could be a stumbling block. "Who's going to put half a billion dollars into a battery plant right now when you don't have certainty on the push for EVs?" the first source said. Battery projects require huge amounts of investment. Swedish battery maker Northvolt obtained record venture capital investment for a European start-up at $15bn. But on 21 November, the company filed for Chapter 11 bankruptcy protection in the US , in part because of difficulties "bridging financing between different stakeholders", outgoing chief executive Peter Carlsson said. The company had already closed down its R&D facility in the US and put plans for factories in Canada, Germany and Sweden on hold. Its financial woes intensified after the Swedish government declined to invest. Other European governments have already reduced financial support for EVs, more for spending reasons than policy, which has softened demand in the region. France recently changed eligibility requirements for subsidies , and Germany ended its subsidy late last year. Some companies, like Norwegian battery materials company Vianode, have been planning multi-billion dollar investment programmes to expand their reach in the automotive industry throughout North America and Europe. It is not clear if Trump's election will have an effect on these plans. Vianode opened its first anode graphite production plant, Via One, in Herøya, Norway, in October. The plant will have a capacity of 2,000 t/yr, enough to supply 30,000 EVs annually, according to Vianode. Chinese firms have scaled up production of key battery materials at all stages of the supply chain, creating more competition for European and US producers. Chinese producers dominate the global EV market with about 70pc of market share, even as the EU and US have put policies in place to try to support their domestic industry. China's lithium-ion battery exports to the US jumped in November as suppliers looked to get ahead of potential new tariffs. The Trump administration is likely to increase tariffs on Chinese lithium-ion batteries to as much as 60pc in the coming few months after Biden earlier this year lifted them to 25pc from 7.5pc. This could help support US-based battery plants. But tariffs on Chinese goods could also present additional challenges, as the raw materials for synthetic graphite often have some Chinese components. Needle coke, traditionally the main raw material for synthetic graphite used in battery anodes, is not widely produced outside of China. And while companies in China have been researching options for using a wider range of petroleum coke qualities , specifications are still relatively narrow, with battery companies in China absorbing most of the world's suitable coke . One graphite anode plant in Europe has been struggling to procure petroleum coke, according to a market participant. Sourcing coke for synthetic graphite in Europe and other ex-China locations is likely challenging, as most of these refineries and calciners have tied up their supply in long-term commitments, one producer said. Refineries are also reducing coke production, as the required feedstocks have become more costly. By Lauren Masterson and Hadley Medlock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Syrian rebuilding may boost Turkish cement

23/12/24

Viewpoint: Syrian rebuilding may boost Turkish cement

London, 23 December (Argus) — Turkey's cement production and sales may rise in 2025 because of potential reconstruction projects in neighbouring Syria, potentially boosting petroleum coke consumption by those producers. The fall of the Bashar al-Assad government in early December may lead to a surge in Syrian demand for construction materials, including cement. Turkey is likely to be a major cement supplier to Syria given Turkey's close ties with Hayat Tahir al-Sham (HTS), the main militant group behind the armed revolt to topple Assad. Turkey's foreign minister Hakan Fidan and intelligence chief Ibrahim Kalin visited Damascus on 12 December , becoming the first foreign officials to meet with HTS leader Ahmed al-Sharaa, even though Ankara — a Nato member — does not openly support HTS. HTS remains a designated terrorist organisation by the UN Security Council. While it could take several months for Syrian cement demand to increase, the market was quick to react to the possibility, with Turkish cement prices rising by 10pc in the week following the Syrian regime's fall. A possible tripling of volumes Turkey could export up to 3mn t/year of cement to Syria in upcoming years, according to one cement maker, compared with the 1mn t supplied last year and 1.1mn t in the first 11 months of this year, customs data compiled by Global Trade Tracker (GTT) show. Turkey's exports to Syria reached a record high of 2.67mn t in 2009. Turkey's cement production and sales are expected to be about 85mn t this year and may increase by at least 10-15pc in 2025, following the developments in Syria, a second cement producer said. If this happens, cement plant capacity utilisation rates could rise further in 2025 from over 60pc in 2024 and 58pc in 2023, according to data from the Turkish Cement Manufacturers' Association (TCMA). Turkey's cement industry has a total production capacity of over 148mn t/year, TCMA data show. Egypt and Algeria are also among possible cement suppliers to Syria given their location as well as production and port capacity. The relatively low price of cement means that transportation costs factor heavily into the profitability of the building material. But inland shipments by trucks will be more cost-effective than seaborne shipments from Africa, giving Turkish cement companies in border areas a significant advantage. "Transportation via trucks is likely to dominate due to its cost efficiency and flexibility for smaller, on-demand shipments," a third cement maker said. "However, seaborne deliveries might play a role in reaching coastal areas like Latakia or Tartus, especially for bulk shipments and regions further from the Turkish border." No quick rebound expected Although some Turkish producers are preparing production and logistics to meet this new demand, it is not expected to materialise immediately because of the unstable political environment in Syria. A trader estimated a minimum of six months before Turkish cement exports to Syria significantly increase. And some Turkish cement plants are less optimistic about the prospects for increased demand, expecting minor production and sales changes because of Syria. This year has been challenging so far for Turkish plants as they faced high inflation, a weaker lira against the US dollar and a ban on exports to Israel , as well as tough competition in major external markets. Certain cement operations — particularly inland plants located far from ports with limited export sales — were likely to reduce output or even halt production lines in the second half of this year. Furthermore, a destructive earthquake in early 2023 hit the area closest to the country's border with Syria. Plants there are operating at full capacity to cover domestic demand to rebuild from the earthquake and are unlikely to have extra production to sell to Syria for at least 2-3 years, another cement maker said. But if Turkey benefits from a boost in Syrian cement demand, Turkey's full-year 2025 coke imports may increase to a historical record of 4.7mn-5mn t, especially since prices are expected to remain low compared with coal, a market participant said. Cement producers received 3.75mn t of coke during the first 10 months of 2024, with full-year imports likely exceeding 4.5mn t, the highest since 4.64mn t in 2018, GTT data show. By Alexander Makhlay Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US Congress passes waterways bill

19/12/24

US Congress passes waterways bill

Houston, 19 December (Argus) — The US Senate has passed a bipartisan waterways infrastructure bill, providing a framework for further investment in the country's waterways system. The waterways bill, also known as the Water Resources and Development Act (WRDA), was approved by the Senate in a 97-1 vote on 18 December after clearing the US House of Representatives on 10 December. The WRDA's next stop is the desk of President Joe Biden, who is expected to sign the bill. The WRDA has been passed every two years, authorizing the US Army Corps of Engineers (Corps) to undertake waterways infrastructure and navigation projects. Funding for individual projects must still be approved by Congress. Several agriculture-based groups voiced their support for the bill, saying it will improve transit for agricultural products on US waterways. The bill also shifts the funding of waterways projects to 75pc from the federal government and 25pc from the Inland Waterways Trust Fund instead of the previous 65-35pc split. "Increasing the general fund portion of the cost-share structure will promote much needed investment for inland navigation projects, as well as provide confidence to the industry that much needed maintenance and modernization of our inland waterway system will happen," Fertilizer Institute president Corey Rosenbusch said. The bill includes a provision to assist with the damaged Wilson Lock along the Tennessee River in Alabama. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Alabama lock expected to reopen late April

18/12/24

Alabama lock expected to reopen late April

Houston, 18 December (Argus) — The main chamber of the Wilson Lock in Alabama along the Tennessee River is tentatively scheduled to reopen in four months, according to the US Army Corps of Engineers (Corps). The Corps expects to finish phase two of dewatering repairs on the lock on 20 April, after which navigation can resume through the main chamber of the lock. The timeline for reopening may shift depending on final assessments, the Corps said. Delays at the lock average around 12 days through the auxiliary chamber, according to the Lock Status Report by the Corps. Delays at the lock should wane during year-end holidays but pick up as spring approaches, barge carriers said. The main chamber of the Wilson Lock will have been closed for nearly seven months by the April reopening after closing on 25 September . By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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