US coke exports to China fall to 2024 low in May

US green petroleum coke exports to China dropped to their lowest level so far this year in May, although shipments were still up from May 2023.

The US exported 271,800t to China, the lowest volume since December 2023. Exports were down by 16pc from April and 22pc lower than the 10-year average for May, according to US customs data compiled by Global Trade Tracker (GTT). But shipments were 18pc higher than a year earlier, when oversupply in China led US exports to the country to fall to a 17-month low.

Stockpiles of imported coke at Chinese ports have been at historic highs for more than a year, as domestic refinery production recovered and consumption stagnated on a weak property market and abundant coal. These market conditions have slowed Chinese importers' appetite for US coke.

Exports to China were particularly low from Los Angeles, California, at 86,700t. This was the lowest volume since August and 44pc lower than the average over the previous 12 months. This export volume likely reflected a 40-50 day turnaround at PBF Energy's 156,000 b/d Martinez, California, refinery, a key supplier to China. Coke production in PADD 5 was down by 9pc in the first four months from the year-earlier period, according to the latest data from the US Energy Information Administration.

West coast exports to China still totalled 160,200t, nearly 60pc of the monthly US export volume and flat with April levels, as shipments from the San Francisco, California, region rose. Exports from the US Gulf coast fell to 111,600t, their lowest level since January.

US exports to China are likely to fall further following the Chinese government's decision in late May to ban high-sulphur petroleum coke consumption as part of its decarbonisation plan. Although enforcement mechanisms are not yet clear, the policy uncertainty has already dampened import demand. But there could be some bump in shipments in the short term, as companies with term agreements seek to speed up loading ahead of any possible enforcement. Some expect the government could apply new tariffs to coke with more than 3pc sulphur, and China's Custom Administration was heard to have held a meeting on high-sulphur coke on 28 June. But it was not yet clear what if any action officials plan to take.

As Chinese demand waned, a greater proportion of US coke exports went to India in May, with the country taking 629,300t. Shipments to India accounted for 23pc of total US exports, up from 19pc in April and 21pc a year earlier. But Indian demand was not particularly strong, as the country's general elections from 19 April-1 June weighed on cement demand. US exports to India were down by 6pc from a year earlier.

Exports to Turkey, on the other hand, jumped by 85pc on the year, making it the second-largest destination in May with 11pc of total shipments. Turkish buyers were seeking more US mid-sulphur coke following the reinstatement of US sanctions on Venezuela and competitive discounts to Russian coal.

By Lauren Masterson

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