Indian petroleum coke consumption rises in June
India's petroleum coke consumption increased by more than 7pc from a year earlier in June, supported by a recovery in cement output after a nationwide lockdown to contain the Covid-19 outbreak was gradually eased from late April.
Consumption in June, the third month of the country's 2020-21 fiscal year, increased to 1.59mn t from 1.48mn t a year earlier and 1.52mn t in May, according to oil ministry data.
The June increase follows two consecutive months of steep declines in coke consumption. Total consumption fell in May by more than 28pc from a year earlier, following an even bigger 49pc year-on-year drop in April. India's coke consumption in April-June was 4.2mn t, down by 28pc from 5.87mn t in the year earlier period.
Indian cement plants were forced to suspend operations for a month from the last week of March because of the nationwide lockdown. Cement companies began to resume production in the final week of April amid tighter safety guidelines.
The gradual easing of the lockdown has supported cement demand and helped plants to increase their operating capacity. Indian cement output contracted by 22pc in May from a year earlier, to 22.2mn t. But output in May was up sharply from April, when the industry produced 4mn t of cement.
June's cement output data will only be released later this month but market participants expect a further recovery compared with May, which is underscored by the increase in coke consumption during the month. The Indian cement-making industry, the second biggest in the world, accounts for 71pc of the country's total coke consumption.
India produced around 334mn t of cement in 2019-20, marginally lower than an all-time high of 337mn t in 2018-19. Output could post a double-digit decline in 2020-21, market participants said, which could weigh on demand for seaborne coke.
ACC, the Indian arm of Switzerland-based cement producer LafargeHolcim, expects cement demand to contract sharply this calendar year, even as it is optimistic about a gradual recovery in the second half of 2020. India's gross domestic product is expected to contract in 2020-21 after rising by 4.2pc in 2019-20, hitting cement demand.
An uptick in consumption along with firm seaborne coke prices has prompted domestic producers to increase their July sales prices. India's largest private-sector petroleum coke producers RIL and Nayara Energy raised their basic sales prices for July by more than 18pc compared with June. Indian state-controlled refiner IOC has also increased its basic sales price for petroleum coke by up to 13pc from June.
Related news posts
US House panel advances waterways’ projects bill
US House panel advances waterways’ projects bill
Houston, 27 June (Argus) — A Congressional committee on Wednesday advanced a bill to authorize a bundle of US port and river infrastructure projects for the US Army Corps of Engineers (Corps). The Water Resources Development Act (WRDA) biennially authorizes projects handled by the Corps' civil works program aimed at improving shipping operations at the nation's ports and harbors, and along the inland waterway system. The traditionally bipartisan legislation also approves flood and storm programs, and work on other aspects of water resources infrastructure. The House of Representatives' Transportation and Infrastructure Committee on Wednesday passed the bill by a 61-2 vote. The Senate Committee on Environmental and Public Works passed its own version of the bill on 22 May by a 19-0 vote. Neither the full Senate nor House have yet voted on the bills, which will need a conference committee to sort out different versions. A key difference is that the House bill did not include an adjustment to the cost-sharing structure for lock and dam construction and major rehabilitation projects. The Senate measure adjusted the funding mechanism so that 75pc of costs would be paid for by the US Treasury Department's general fund, with the rest coming from the Inland Waterways Trust Fund. The 2022 version of the bill made permanent an increase to 65pc from the general fund and 35pc from the trust fund, which is funded by a barge diesel fuel tax. The House committee's decision not to include the funding change drew disappointment from shipping interests. The Waterways Council was "disappointed that the House did not include a provision to modernize the inland waterways system", but was hopeful that conference negotiations would result in its inclusion, Tracy Zea, chief executive of the group, said. The latest House version of the bill authorizes 12 projects and 160 new feasibility studies. Among the projects receiving approval were modifications to the Seagirt Loop Channel near the Baltimore Harbor in Maryland. The federal government would pay $47.9mn towards an estimate $63.9mn project to widen the channel, which would help meet future demand for capacity within the Port of Baltimore. That would include increased container volume at the Seagirt Marine Terminal. The project was in the works before the 26 March collapse of the Francis Scott Key Bridge temporarily diverted freight from Seagirt and many other port terminals. The committee also authorized $314.25mn towards a resiliency study of the Gulf Intracoastal Waterway. The study would consider hurricane and storm damage and identify ways to improve navigation, reduce the maintenance requirements, and provide resiliency. The waterway connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. The House version of the bill also includes provisions to strengthen flood control, wastewater, and stormwater infrastructure. "Critically, WRDA 2024 will help communities increase resiliency in the face of climate change," representative Rick Larsen (D-WA) said. By Abby Caplan and Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India’s Ultratech buys stake in India Cements
India’s Ultratech buys stake in India Cements
Singapore, 27 June (Argus) — India's Ultratech is buying a 23pc stake in fellow domestic cement producer India Cements in a further consolidation of the sector. Ultratech is spending 18.85bn rupees ($226mn) in acquiring 70.6mn shares of India Cements at a price of Rs267/t share. The share value of India Cements on the Bombay Stock Exchange on 27 June rose by more than 13pc to touch a 52-week high of Rs299/t share following Ultratech's purchase. India Cements produced 9.45mn t of cement and recorded consolidated revenues of Rs51.12bn during India's April 2023-March 2024 fiscal year. Ultratech's move comes two weeks after Adani Group-controlled Ambuja Cements acquired Penna Cement for $1.25bn. Penna has 10mn t/yr of operational cement manufacturing capacity and is adding another 4mn t/yr over the next 12 months. Adani's latest deal will raise the group's capacity to 89mn t/yr, reinforcing its position as the country's second-largest cement producer after Ultratech. Ultratech operates 146mn t/yr of capacity and aims to reach 200mn t/yr by 2030, while Adani is targeting 140mn t/yr by 2028. The Indian cement sector has seen increasing consolidation as smaller regional producers face an extremely challenging operating environment. Such regional participants have been exiting the sector as they are unable to compete with national firms, giving way to a wave of consolidation in the industry. The aggressive medium-term capacity targets of larger companies are unlikely to be achieved organically. Capacities totalling more than 200mn t/yr have changed hands in the past decade, according to industry estimates. Rapid urbanisation, a growing middle class and affordable housing, as well as the construction and other infrastructure sectors, are expected to drive growth in the cement sector. India is the world's second-largest cement market after China with an installed capacity of about 550mn t/yr. There is significant potential for cement sector growth in India. The country's consumption is 242kg per capita compared with a global average of 525kg, Adani said after it entered the sector in September 2022 with the acquisition of ACC and Ambuja Cement, the two listed Indian subsidiaries of Holcim, for $10.5bn. By Ajay Modi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
China seeks to curb high-sulphur fuel coke
China seeks to curb high-sulphur fuel coke
Shanghai, 5 June (Argus) — A new Chinese government decarbonisation action plan seeks to ban the use of high-sulphur fuel-grade coke, which could further cut the country's seaborne imports and sink demand for domestic and stockpiled high-sulphur coke. The country's State Council on 29 May issued an action plan for energy conservation and carbon reductions for 2024-25 . The plan prohibits using high-sulphur petroleum coke as fuel, except in petrochemical enterprises' own existing generation units, as part of a broader plan to cut fossil energy consumption. China generally considers any coke with more than 3pc sulphur to be high sulphur. The plan aims to cut China's energy consumption per unit of gross domestic product (GDP) by about 2.5pc and CO2 emissions per unit of GDP by 3.9pc this year, with large cuts to coal consumption. The document states that 39pc of total power generation should come from non-fossil fuels by the end of 2025. Ferrous and non-ferrous metals are set to be affected. Coke production could be hit as well, as the plan includes scrapping smaller crude distillation units and capping domestic crude processing capacity to within 1bn t/yr (20mn b/d) by the end of 2025. China has since March 2021 been committed to a "dual carbon" goal of achieving peak carbon emissions by 2030 and carbon neutrality by 2060. But environmental goals took a backseat during the difficult economic years of the Covid-19 pandemic, as authorities were more concerned about GDP growth. The end of China's high-sulphur fuel coke market? While the plan clearly prohibits most high-sulphur fuel coke consumption, it is unclear what enforcement mechanisms will be put into place. China in 2015 passed a law banning high-sulphur coke imports , but after a brief period of market disruption, high-sulphur imports resumed as normal. China imported nearly 12mn t of greater than 3pc sulphur coke in 2023, according to Global Trade Tracker (GTT) data. This has some coke market participants wondering if the latest plan will actually be as disruptive as it appears. Power plants that consume high-sulphur fuel grade coke have yet to receive any formal notice, one trader said, adding that the government will require more time to sort out the roadmap for the country's high-sulphur coke exit. Another trader said that the language is vague and up for interpretation. But the first source did not think the announcement should be set aside, contending that this time the Chinese government is serious. If enforced strictly, the plan could have a significant impact on China's domestic and imported high-sulphur fuel-grade coke. Some power plants in southern China purchase high-sulphur coke to blend with thermal coal to keep fuel costs low. Cement makers and glass manufacturers can sometimes also use this coke, even occasionally Saudi Arabian 8.5pc-9pc sulphur coke. In April, large amounts of high-sulphur shot coke were stockpiled at ports in south China's Guangxi region, mainly Saudi Arabian and Venezuelan coke. Much of this is likely still in stocks, as it was previously purchased at high levels, while low coal prices have kept coke from being particularly competitive as a fuel. This weak market for high-sulphur fuel coke has kept seaborne imports lower so far in 2024 — year-to-date through April, greater-than-3pc sulphur coke imports are down by 37pc from January-April 2023 at 3.5mn t. Imports from Venezuela are down by 71pc on the year to 404,400t, while high-sulphur coke imports from the US, China's largest supplier, are down by 78pc to 483,400t. On the other hand, high-sulphur imports from Russia are up by 22pc to 884,300t and 8.5pc sulphur Saudi imports doubled to 762,400t over the same period. At least some portion of these imports are going into the anode-grade coke market, where it is used as a feedstock rather than a fuel. Calciners can use up to 8.5pc sulphur coke as long as it is sponge grade and its metals are not too high. Countries like Kuwait and Oman typically supply higher-sulphur anode-grade coke, and others like the US and Canada have a mixture of anode-grade and fuel-grade quality with more than 3pc sulphur. This makes it difficult to break down exactly how much of China's greater-than-3pc sulphur imports are currently being burned as fuel, but it is likely the majority of the high-sulphur US, Saudi Arabian and Venezuelan supplies are being used this way. This leaves open the question of what will happen to these millions of tonnes of high-sulphur fuel-grade coke if they can no longer be consumed in China. Some Chinese refineries also produce high-sulphur coke and do not necessarily have the capability to consume it all internally. Although India is also a large consumer of high-sulphur fuel grade coke, it could have difficulty absorbing all of the supply that could be stranded by a Chinese exit. India's cement makers imported only 8.2mn t of high-sulphur fuel-grade coke in 2023, less than 70pc of China's total. Indian buyers also do not typically attach much value to sulphur content, preferring 6.5pc and 8.5pc sulphur coke and not paying a premium for 3-6pc sulphur cokes. While the full long-term impact of the policy remains unknown, the uncertainty it has sparked will have a chilling effect on China's high-sulphur coke demand, market participants said. "Until there is further clarification, none of the Chinese traders will look at petcoke," a third source said. China >3pc sulphur green coke imports ’000t China high-sulphur coke pc of coal % Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Possible Canadian rail strike start delayed again
Possible Canadian rail strike start delayed again
Washington, 31 May (Argus) — The start of a threatened strike by some union workers at Canadian National (CN) and Canadian Pacific Kansas City (CPKC) has been pushed back again as concerns about fuel and food supplies rise. If it goes forward, the strike would begin sometime after 17 June at the earliest. The Canada Industrial Relations Board (CIRB), which is investigating federal government concerns, has postponed reply comments to 14 June from 31 May. Original comments were due by 21 May. If CIRB ruled on 15 June, the Teamsters Canada Rail Conference (TCRC) would have to provide three days' notice to CN and CPKC before workers could strike. But a strike may still may not occur for another 60 days . If CIRB issues any orders, the parties would likely not be in a position for a strike or lockout to begin for two months, CPKC said on 16 May. TCRC members had authorized a strike to start as early as 22 May. The railroads and union met with CIRB on Monday and discussed the comments filed by groups that could be affected by a strike. Canadian minister of labour Seamus O'Regan asked CIRB earlier this month to consider requiring some rail service to continue in the event of a strike to help avoid health and safety issues related to propane supply. A number of concerns arising from the comments have been identified, with many focused on the impact to commercial and economic interests, CIRB said. The theme of certain comments concerned delivery of supplies of propane and diesel to critical areas, including and remote communities in northern British Columbia. Transportation also is important to the province of Manitoba which has been using rail to deliver fuel because of a Winnipeg products pipeline. Other comments focused on domestic and global food security. They noted some sectors are dependent on rail for transportation, such as fertilizer, potash and canola products, CIRB said. The potential, immediate impact on the supply of water treatment materials for several municipalities also was highlighted. Other commentators sought advance warning of strike, asking CIRB to provide notice of when a decision would be made or that there be an extension of the notice required before a strike or lockout. Negotiations between the railroads and TCRC continue. CN and the union will meet next week from 4-6 June. CPKC declined to comment on talks but met most recently with TCRC leadership between 15-21 May. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more