Use of Petroleum Coke rather

than Coal in Current Market

Atmosphere
Jitendra Roychoudhury
27/04/2016

Argus Asian Petroleum Coke - 2016

Petroleum Coke Can it change the dynamics in India?

Cement production constrained

Coal massive increase in production
Petroleum coke domestic capacity and global

dynamics
What happens in India?

Introduction: KAPSARCs
mission and structure

Argus Asian Petroleum Coke - 2016

Argus Asian Petroleum Coke - 2016

An independent non-profit research center focused on energy

economics & policy

Advance understanding of energy economics and act as a

catalyst for dialogue, charting a path to better welfare for
societies, locally and globally.
Strategic Objectives

Develop sustainable economic frameworks that lead to:

Lower societal costs of energy supply

Higher value created from energy consumption
Better alignment between energy policy objectives and
outcomes

Argus Asian Petroleum Coke - 2016

Research Programs and Focus Areas

Argus Asian Petroleum Coke - 2016

Discussion Papers

Workshop Briefs

Tools and Datasets

A KAPSARC research paper

A short, 7-10 page, non-attributional,

summary of a KAPSARC Energy
Workshop

Databases (such as policy dB,

weather etc.) or tools such as
models (e.g. CGE model source code
or models for collective decisionmaking processes)

Cement growth constrained

Argus Asian Petroleum Coke - 2016

Argus Asian Petroleum Coke - 2016

Cement production continues to grow

Cement Production (Mill Tons)
300

250

200

150

100

50

FY 2009-10

FY 2010-11

FY 2011-12

FY 2012-13

FY 2013-14

FY 2014-15

Source: Office of Economic Advisor

Muted growth 4.5 % CAGR, capacity utilization at 70%.

Governments infrastructure spending should push growth. Production capacity expected to

reach 500 Mt by 2020.

Argus Asian Petroleum Coke - 2016

Real estate and funding issues in infrastructure

Cement Production (Mill Tons)
30.00

25.00

20.00

15.00

10.00

5.00

Source: Office of Economic Advisor

Recent events have affected monthly production drought, banks, infrastructure

Expectations remain strong on the back of a better monsoon

Current thermal coal market

scenario

Argus Asian Petroleum Coke - 2016

Argus Asian Petroleum Coke - 2016

Thermal coal is strong

Thermal Coal Consumption (Mill Tons)
600

500

400

300

200

100

0
FY 2009-10

FY 2010-11

FY 2011-12
Domestic Production

FY 2012-13

FY 2013-14

FY 2014-15

Imported Coal

Source: HDR Salva, ICMW

Strong domestic production, imports growth muted

11

Argus Asian Petroleum Coke - 2016

Coal production continues to grow

Coal Market Developments
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
-

Imported Coal (Mt)

Domestic Production (Mt)

Mine Stocks (Mt)

Port Stocks (Mt)

Source: ICMW, HDR Salva

Imports have declined as domestic production has increased and mine stocks utilized
Port stocks had risen as imports had languished.

12

Pet Coke Supply Scenarios

Argus Asian Petroleum Coke - 2016

Argus Asian Petroleum Coke - 2016

Petroleum coke consumption grows

Petroleum Coke Consumption (Mill Tons)
14.00
12.00
10.00
8.00
6.00
4.00
2.00
FY 2009-10

FY 2010-11

FY 2011-12

Petroleum Coke Production

FY 2012-13

FY 2013-14

FY 2014-15

Petroleum Coke Imports

Source: ICMW, KAPSARC Analysis

Increase in domestic pet coke production as refineries are using cheaper and heavier

crude oil.
Consumption rising as cement plants switch to higher cv pet coke. Railway logistics being

constrained means using pet coke is a better option when compared to lower cv coal.
14

Argus Asian Petroleum Coke - 2016

Additional Capacity on the Way

Current Capacity (t)

IOC, Guwahati
IOC,Barauni
IOC, Koyali
IOC, Digboi
IOC, Panipat
IOCL, Bongaigaon
NRL,Numaligarh
MRPL, Mangalore
RPL, Jamnagar
RPL,SEZ
EOL, Vadinar
BORL, Bina
HMEL, Bathinda

2012-13
55,000
142,000
606,000
40,000
885,000
129,000
65,000
2,873,000
3,578,000
1,739,000
410,000
457,000
10,979,000

Planned Capacity (t)

2013-14
61,000
124,000
681,000
35,000
978,000
128,000
67,000
2,799,000
3,849,000
2,112,000
438,000
795,000
12,067,000

2014-15
60,000
132,000
761,000
35,000
869,000
139,000
93,000
367,000
2,844,000
3,600,000
2,248,000
530,000
770,000
12,448,000

Operational /Planned
CPCL (MRL), Manali
IOC, Paradip
NOCL, Cuddalore
BPCL, Kochi
IOC, Haldia

500,000
1,250,000
400,000
1,300,000
500,000
3,950,000

Source: MoPNG Stats, KAPSARC Analysis

Pet coke capacity will increase

from 12.44 Mt to 16.35 Mt

Need for transportation fuels will

drive further pet coke capacity

Source: MoPNG Stats, KAPSARC Analysis

15

Argus Asian Petroleum Coke - 2016

Imports show strong growth

Petroleum Coke Imports (Mt)
6.0

5.0

4.0

3.0

2.0

1.0

0.0

FY 2009-10

FY 2010-11

FY 2011-12

FY 2012-13

FY 2013-14

FY 2014-15

Source: ICMW, KAPSARC Analysis

Rising costs and squeezed margins in cement = pet coke imports

16

Feb-16

Dec-15

Oct-15

Aug-15

Jun-15

Apr-15

Feb-15

Dec-14

Oct-14

Aug-14

Jun-14

Apr-14

Feb-14

Dec-13

Oct-13

Aug-13

Jun-13

Apr-13

Feb-13

Dec-12

Oct-12

Aug-12

Jun-12

Apr-12

Feb-12

Dec-11

Oct-11

Aug-11

Jun-11

Apr-11

Feb-11

Dec-10

Oct-10

Aug-10

Jun-10

Apr-10

Feb-10

Dec-09

Oct-09

Aug-09

Jun-09

Apr-09

Argus Asian Petroleum Coke - 2016

Impact of global dynamics higher imports

Petroleum Coke Imports (Mill Tons)

1.4

1.2

0.8

0.6

0.4

0.2

Source: ICMW, KAPSARC Analysis

Greater availability, impact of Chinese policy constraints, start of YASREF

17

Argus Asian Petroleum Coke - 2016

Global Dynamics of pet coke

U.S. Petroleum Coke Exports (Mbbl)

15,000

13,000

11,000

9,000

7,000

5,000

3,000

U.S. Exports to China

U.S. Exports to Japan

U.S. Exports to Brazil

U.S. Exports to Turkey

U.S. Exports to Mexico

U.S. Exports to Spain

Dec-15

Oct-15

Jun-15

Aug-15

Apr-15

Feb-15

Dec-14

Oct-14

Aug-14

Jun-14

Apr-14

Feb-14

Dec-13

Oct-13

Aug-13

Jun-13

Apr-13

Feb-13

Dec-12

Oct-12

Aug-12

Jun-12

Apr-12

Feb-12

Dec-11

Oct-11

Aug-11

Jun-11

Apr-11

Feb-11

Dec-10

Oct-10

Aug-10

Jun-10

Apr-10

Feb-10

Dec-09

Oct-09

Aug-09

Jun-09

Apr-09

1,000

U.S. Exports to India

Source: U.S.EIA

Global pet coke dynamics played a huge role in increased exports to India
18

Pricing and Global

Dynamics

Argus Asian Petroleum Coke - 2016

Argus Asian Petroleum Coke - 2016

Price Dynamics of pet coke

Source: Platts

Supply dynamics, shale oil pet coke and Chinese rumours

20

Argus Asian Petroleum Coke - 2016

Pet Coke and Coal pricing

Source: IHS

Markets corrected as coal prices declined and new pet coke supply came online

21

Argus Asian Petroleum Coke - 2016

Fuel supply mix of

Challenges and
Opportunities

Coal east coast ;

transportation over a
congested railway network
Cement plants widely

distributed near demand

centers as well as mines
Ports widely dispersed but

challenge of congestion and

evacuation

22

Argus Asian Petroleum Coke - 2016

Opportunity - Supply glut may soften pet coke prices

Increase in LNG,
heavier Canadian
crude, Shale oil

Saudi Pet Coke

Pet Coke diverted from

China, because of air
quality concerns

U.S. Pet Coke

Increased domestic
production in India

23

Argus Asian Petroleum Coke - 2016

Implications
Supply from US/Canada will continue; Shale oil produces medium
sulphur pet coke. Heavier Canadian crude is locked to US refineries;
Chinese uncertainty: Imposition of sulphur constraints in China will mean
that cargo might be diverted to India;
Increased pet coke production within India will mean that domestic
availability might start setting the price bottoms;
As Coal India continues to increase production, government might use
pricing and policy to curtail pet coke imports; Commercial mining might
further affect the pet coke dynamics;

24

Jitendra Roy Choudhury

Jitendra.Roychoudhury@kapsarc.org
T +966 11 290 3181
www.kapsarc.org

Thank you for your attention