Petcoke Industry Analysis
The research brief below provides qualitative and quantitative insights into the petcoke industry based on available data in the public domain. Some of the insights provided include information on the buyers and consumers of the product, the producers or sellers, the pricing trend over the years, and other relevant data points such as the market size and growth.
Buyers of Petroleum Coke
- Some of the major industries that purchase and consume petcoke include the power, cement, aluminum, and steel industries.
- Worldwide, around 45% of petroleum coke is purchased by the steel and aluminum sector. The rest are used as fuel.
- Petcoke can be classified as fuel grade coke and calcined coke.
- Consumers in the cement and power sector mostly purchase fuel-grade coke due to its lower cost and high calorific content.
- Meanwhile, calcined pet coke is mostly used in the following sectors: "paints and colorings, aluminum, steel, and the fertilizer industries for titanium dioxide production."
- The battery industry also uses calcined coke for its battery electrodes.
- Consumers of the product mostly come from the Asia Pacific region. Most of the buyers come from China and Japan.
- Meanwhile, emerging markets such as India and China use a huge percentage of the product in their power plants and cement kilns.
- Most of the petcoke in China are used in generating electricity in power plants.
- In India, the product is mostly used in the cement industry to support the fast pace of industrialization in the nation.
- In Europe, petcoke is mostly used in producing power.
- For the Middle East and African regions, petroleum coke is used to support infrastructure projects.
Petroleum Coke Producers
- Most of the petroleum coke exports come from North America.
- The leading manufacturers in the sector include Sinopec, ExxonMobil, CNPC, Shell, Marathon Oil, Rosneft, and Saudi Aramco.
- Sinopec is the biggest producer with around 10% of the worldwide sales figure in 2019.
- Other key manufacturers of this product includes Valero, PDVSA,Petrobras, Total, BP, JXTG, Pemex, Chevron, and IOCL.
Pricing Trends through the Years
- The series of charts below shows the petcoke's highly volatile pricing trend over several years:
- Based on the HDFC Securities report above for petcoke's pricing from 2016 to 2020, the petcoke prices in 2020 follow a downward trend. On February 2020, the average price of petcoke is at its lowest in 3.5 years due to lower fuel prices.
- Meanwhile, the product is expected to recover in 2021 as the current global pricing trends for this product have seen price rallies worldwide.
- Meanwhile, the following chart from Argus Media also shows the pricing volatility of petcoke grades from 2013 to 2019:
- Petcoke pricing trend
- Meanwhile, several pricing charts from European countries such as the one from Germany below also show the highly volatile pricing trend of the petroleum coke product from 2012 to 2020.
- Producer Prices in the Petroleum Coke Industry in Europe
- Based on the Argus Report Petroleum Outlook, the implementation of IMO 2020 is projected to have a significant impact on the petcoke sector in the coming years, with certain present features around supply and pricing mirroring future expectations.
- Numerous facets of the industry are significantly different from how they are projected to behave once marine emission limits take effect. From IMO 2020 onwards, the following significant implications are expected to happen in the industry:
- • Increased production of petroleum coke — broader crude and product spreads are expected to increase coker utilization, while new capacity will also emerge.
- • Specification of generated petroleum coke — danger to some low-sulfur petroleum coke production when coker feedstocks change
- • Increased freight costs – increased marine fuel prices should have an effect on netbacks to important exporting regions.
- • Competition from HSFO in consuming sectors – although competition is unlikely to be significant, excess HSFO may replace some usage of this product in certain sectors such as cement.
- While certain locations are benefiting from recent coker expansions, output across the USGC is now declining compared to the previous year. This is mainly as a result of increased maintenance on cokers in the run-up to IMO 2020. However, a shift in crude slates is limiting coke production as a result of the loss of supplies from Venezuela, which has pushed the increased usage of domestic light crudes.
- Prices for "low-sulfur anode grade petroleum coke" are also quite low. Prices of anode grade GPC and CPC have declined more rapidly than those of aluminum since certain merchant calciners have had to adjust to the impact of some regulations. The supply of ultra-low-sulfur anode grade petroleum coke is considered to be threatened by the change in coking margins, as this feedstock can be mixed into the more valuable 0.5pc sulfur bunker fuel.
- The Fob prices of "USGC 6.5pc sulfur petroleum coke" have already decreased dramatically over the last year, from $85/t to $45/t.
- Expanding the supply of USGC petroleum coke in a down spiraling thermal coal sector is a critical component in the fuel-grade price model outlook.
- The impact of IMO 2020 on the market for anode-grade petroleum coke has been on the industry's radar for some time now.
- Before the deployment of IMO, the pricing level already suggests that purchasers are unconcerned about availability until refineries begin to make changes.
- However, given the current state of the sector, a supply disruption in this area of the market might very quickly alter the trajectory of pricing for the coming years.
Petroleum Coke Market Size
- The global petroleum coke (Petcoke) sector is considered to be relatively fragmented.
- The global market size of the petroleum coke sector was worth $25 billion in 2020. It is projected to increase by 7.8% from 2021 to 2026. Using a reverse CAGR calculator, the market's value in 2027 was calculated to be around $36.39 billion.
- In 2016, the size of the global petcoke market was around $16.68 billion. The expected CAGR around that time was 8.6% for the 2017 to 2023 forecast period.
To provide qualitative or quantitative insights into the petcoke industry around the buyers and consumers of the product, the producers or sellers, the pricing trend over the years, and other relevant information, we leveraged the most reputable sources of information in the public domain such as industry experts publications (SPG Global Platts, Chem Analyst, etc.), market research reports (Market Watch, Allied Market Research, etc.), as well as economic charts from Trading Economics and HDFC Securities. We also included other relevant data points such as the market size and growth.