US Gulf calcined petcoke prices stable in mid-September

Prices of US Gulf calcined petcoke were steady in mid-September, with limited spot activity and no reports of concluded third-quarter contract pricing negotiations.

The Platts monthly assessment for spot US Gulf calcined petcoke held at $580-$595/metric ton in August, unchanged from July. The assessment reflects the spot transactable value for calcined petcoke with 3% sulfur and 400 parts per million vanadium, loading 30-60 days out.

An Indian smelter was understood to be considering buying a 20,000 mt US Gulf cargo, 3% S max/400 ppm V max, with a November laycan, and an offer indication was heard in the low $600s/mt.

Indicative offer prices from China, a regular supplier to Indian smelters, were heard to be $650/mt or higher for regular export grades. In August, an Australian smelter was heard to have booked a 20,000 mt CPC cargo with 2.6% S/350 ppm V for November loading at $650/mt FOB China. In July, the same buyer booked an Indian CPC cargo for August loading at $580-$585/mt FOB.

On a landed basis, a $600/mt FOB cargo would be at around $680-$690/mt FOB, according to market participants, while a $650/mt FOB China cargo would land in India at about $700/mt.

Market participants said a rotary kiln cargo from the US Gulf, compared with a shaft-coke cargo from China, did not appear to be a deal breaker, even though many smelters prefer shaft-coke CPC to rotary-kiln-produced CPC, as the former is typically denser and allows longer anode life in the smelting pots.

Freight rates remain at elevated levels, in large part, because of high bunker-fuel prices, which have tracked gains in crude oil. High war-risk insurance premiums for transiting the Red Sea and draft restrictions in the Panama Canal, because of El Niño-induced drought, are also putting upward pressure on freight. Many shipowners and operators are choosing not to transit the Suez Canal and Red Sea and are going around the Cape of Good Hope instead, increasing voyage times and bunker fuel consumption.

It was not clear whether the disparity between Chinese and US Gulf CPC prices was wide enough to reopen the US Gulf to India arbitrage, market participants said.

There were no reports of concluded third-quarter contract price negotiations, although a calciner source said he thought one was close to being settled. He said it was a typical discussion. "The smelters want it down by $10, and we want it up by $10-$20, so my guess is it will be flat overall."

A smelter source said supply of low-sulfur green coke from South America was stable overall.

"I heard there was more Petrobras green coke available, but less Argentinian," the smelter source said, adding the two may offset each other.

Market participants said Argentinian refineries were processing more shale oil and exporting other grades of crude oil, giving lower yields of low-sulfur green coke.

"As usual, whatever happens in China will be the biggest driver," the smelter source said. "If you look at everything in CPC, there's no clear price trend in the US Gulf. Chinese prices seem to be stable, and they're channeling so much of their CPC into anode for the new smelters in Indonesia and elsewhere."

A trader also thought the CPC market was flat for now, "but I think there is more upside than downside. But he also said, "There's no shortage of calcined petcoke, it's the green coke that's the issue."

He said there was reduced flow of low-sulfur green coke from Russia to China since a Volgograd refinery was hit by a Ukraine drone attack in July.

"It's quite clear that the Chinese calciners aren't chasing export cargoes anymore," the trader said. "They've got strong domestic demand, and there is strong demand for Chinese anode in Indonesia, where you've got lot a lot of smelter capacity coming on stream in Indonesia that does not have its own carbon plants."

Platts will next assess US Gulf calcined petcoke on Sept. 30.

Platts is part of S&P Global Energy.