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Cement and Clinker Price
Markers: Med Basin, Persian
Gulf-Arabian Sea and East
Africa
World and India Petcoke Prices
Webinar presentation
CW Group LLC | T: +1-702-866-9474 | F: +1-928-832-4762 | Connecticut, USA
October 25, 2016
Client Confidential Information
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2
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Client Confidential Information
Agenda
CW Group overview
Introduction to India petcoke price marker
Petcoke prices & market representation
– Domestic supply
– CFR pricing
– End-users snapshot
Final remarks
3
Client Confidential Information
Presenter
4
Prashant SinghAssociate Director
ps@cwgrp.com
M: +91-887-960-7047
Associate Director of CW Group,
Mumbai, India
MSIB from Seton Hall University, USA
Extensive experience in management
consulting and market research
Manages CW Advisory queries for the
India operations
Client Confidential Information
5
About the CW Group
CEMENT, BUILDING
MATERIALS &
CONSTRUCTION
STEEL, METALS &
MINING
CHEMICALS DRY BULK CARGO,
PORTS AND
INFRASTRUCTURE
POWER, ENERGY
AND SOLID FUELS
Seasoned expertsBusiness &
technicalNetwork & access Proprietary data
STRATEGY AND M&A
ADVISORYBUSINESS DECISION
SUPPORTMEDIA & MEETINGS
Strategic advisory
Management consulting
M&A advice
Transaction support
Due diligence
Syndicated market /
industry study reports
Reference forecasts
Data and chart-books
Commodity price
assessments
Market reporting services
Newsletters
Online data access
Publications
Meetings
Advisory Research Media
Client Confidential Information
6
CW Mumbai office and Advisory Board Members
Mr. Jean Michel Allard is an independent expert in the cement industry. Mr. Allard gained extensive experience during his forty year tenure with Vicat Group,
an International Cement Organization.
He served as the Deputy CEO of the Vicat Group for twenty-two years and prior to that appointment, he held several managerial positions within the
company.
His ancillary assignments included membership on the Board of Directors of Syndicat Français Industrie Ciment (SFIC) and Chairman of the National
Commission on Safety for the French Cement Profession.
Mr. Jouni Salo is former Chief Executive Officer of KHD Humboldt Wedag International AG (KHD) and former President of the Construction Materials Division
at Metso Minerals Inc. As President of the Construction Materials Business Line, he was responsible for the profitability and reorganization of one of the
largest business divisions, with manufacturing plants in numerous parts of the world, with a strong focus on development of emerging markets. Previously, Mr.
Salo played a pivotal role with Metso in the acquisition and integration of companies around the world.
Mr. Salo is Finnish by birth and has more than 30 years of international business experience in the industrial equipment market. He served in a variety of
senior positions with Helsinki-based Metso Minerals Inc and related operations. He holds a Bachelor of Science degree in Mechanical Engineering from the
Polytechnic College in Hameenlinna, Finland.
Mr. Sumit Banerjee is former vice chairman of Reliance Cement and CEO of Reliance Infrastructure, and former CEO and Managing Director of ACC Limited,
Holcim Group. His career started at L&T in 1979 and during his role as Executive Assistant to a Profit Centre Head in L&T, he had early insights into
Management Control Systems. He also spent 17 years in the Aluminium Sector, with Indal/Hindalco.
Sumit Banerjee is a seasoned business leader with a strong background in manufacturing and infrastructure, a professional with a lengthy top-management
level exposure to core sector industries such as non-ferrous metals, steel processing, cement and infrastructure. Mr. Sumit Banerjee is a Fellow of the
Institute of Engineers, the Founding Chairperson of CII’s Cement Division, a member on the Managing Committee of Bombay Chamber of Commerce &
Industry (BCCI) and a government nominee on the boards of IIM Lucknow and Construction Sector Skills Development Council.
He is a Mechanical Engineering graduate from IIT, Kharagpur and did his 5 month Management Education Programme at IIM Ahmedabad.
Sumit Banerjee
Advisory Board Member
Jean-Michel Allard
Advisory Board Member
Jouni Salo
Advisory Board Member
CW Group has expanded its international foothold by establishing an office in the world’s second largest cement
market
Led by Prashant Singh, Associate Director, the Mumbai CW Research team adds great value to CW’s efforts having
direct access to the Indian cement market, supporting the US and European teams
In the coming years, we look forward to expanding our presence to other global hotspots
Client Confidential Information
Petcoke price assessment overview
8
ABOUT THE REPORT
• Bi-monthly price assessment and monthly price index for
fuel-grade petcoke delivered on 30-60 day forward
period on a CFR basis
• Tracks landed pricing at India West and East Coast ports
• Provides market-moving news, cutting-edge and jargon-
free insights and market commentaries
WHO IS THIS REPORT FOR?
• Petcoke users / buyers
• Petcoke marketers
• Oil refiners
• Solid fuel traders
• Logistics specialists
RELEASE DETAILS
• Publications in PDF via email
• Flash updates: bi-monthly price assessment
• Monthly assessments: extended market update
PRICING
Annual subscriptions:
• Individual: US$ 950
• Site license: US$ 2,850
• Corporate license: US$ 9,950
For more details, please visit
http://www.cwgrp.com/research/research-products/price-assessments/category/27-petcoke
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9
Methodology highlight: Market price index
Primary research
Engaging with traders and end-
users, as well as intermediaries and
other market participants
Petcoke pricing
Aggregating price points obtained
through primary research
Establishing price markers
India CFR petcoke pricing
methodology
• Coal to petcoke comparison (mmBTU basis)
• Latest developments in the petcoke market
• Key insights from producers, traders, end-users
• Domestic production: India and U.S.
• Industry news: coking, refineries, shipping
• Import volume and breakdown by end-user
• End-user snapshot: Cement market – volumes and
market developments
India (CFR) Petcoke Price Assessment also covers:
Client Confidential Information
Petcoke demand from China increasing
10
Import region
Import/export region
Export region
Source: CW Research
2.6 M MT
(-11.0%
YTD)
7.5 M MT
(+83.7%
YTD)
21.6 M MT
(+18.7%
YTD)
Global petcoke trade (YTD Jan-Jul 2016)
0.4 M MT
(-21.6%
YTD)
1.1 M MT
(-42.2%
YTD)
Client Confidential Information
Domestic demand for petcoke increasing; Cement industry remains
the main end-user
11
Indian petcoke consumption (mta)
Source: CW Research, Ministry of Statistics
-1.8%
CAGR
23.7%
CAGR
6
12
18
70%
17%
13%
Cement Power Others*
Most Indian petcoke production consists of
fuel grade petcoke
Petcoke has become a preferential
alternative to coal, but is losing ground as
prices are increasing
Major cement players are currently looking at
adjusting fuel mix
Industry-wise petcoke consumption (%)
Client Confidential Information
India petcoke supply-side
12
0.90 M MT
MRPL 0.50 M MT
CPCL
0.80 M MT
IOC
0.70 M MT
HPCL
1.30 M MT
IOC
0.50 M MT
NOCL
0.50 M MT
IOC
0.50 M MT
IOC
5.60 M MT
RIL
2.31 M MT
Essar
Refineries
Import ports
Source: CW Research Estimates
700
1,000
Se
p-1
5
Oct-
15
No
v-1
5
De
c-1
5
Jan-1
6
Fe
b-1
6
Ma
r-1
6
Ap
r-1
6
Ma
y-1
6
Ju
n-1
6
Ju
l-1
6
Au
g-1
6
Domestic petcoke production (‘000 tons)
Client Confidential Information
CFR petcoke prices are on the rise, reaching peak levels
13
India CFR West Coast (US$/ton) India CFR East Coast (US$/ton)
$70 $95
Aug-16
Sep-16
Oct-16
<5%Sulfur >5% Sulfur
$70 $95
Aug-16
Sep-16
Oct-16
<5%Sulfur >5% Sulfur
$40
$60
$80
$100
Long-term trend: India CFR West Coast (mid-sulfur petcoke) (US$/ton)
Source: CW Research
Client Confidential Information
Petcoke discounts to coal keep sliding
14
$2.0
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16
Richards Bay coal 5,500 kcal/kg NAR >5% petcoke <5% petcoke
Coal to petcoke comparison: India West Coast (US$/mmBTU)
Source: CW Researchh
Petcoke discounts to Richards Bay coal
(5,500 kcal/kg NAR): India West Coast (%)
82
%
61
%
60
%
54
%
49
%68
%
67
%
66
%
59
%
54
%
90
%
84
% 93
%
85
%
79
%94
%
90
%
10
1%
92
%
88
%
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16
G8 grade domestic coal <5,200 kcal/kg Bhavnagar Lignite 4,500 kcal/kg >5% petcoke <5% petcoke
Client Confidential Information
End-user focus: Cement industry
15
India: Cement production (million tons)
-40%
0%
40%
20
22
24
26
28
LH - cement production (mn tons) RH - MoM change (%)
• India is seeing strong
demand levels so far this
year.
• In 2016, demand for
cement in India is expected
to see strong growth on
account of infrastructure
and housing investments
• Current rise in input prices
expected to put a strain on
cement companies’ margins
in the following quarters
• Should petcoke prices
continue to increase,
companies could consider
decreasing the use of
petcoke in favor of coal and
other fossil fuels, as well as
increasing focus on using
green and alternative
source of fuels
Client Confidential Information
Final remarks
Pricing
– CFR petcoke prices keep rising and are expected to remain firm. Is this a
long term trend?
End-users: Cement
– With strong demand for cement expected in the industry, do high fuel prices
pose threats to the market?
16
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specializing in M&A and transaction advisory,
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CW Advisory works with boards and senior
management addressing the most complex
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spanning the value chain, including fuels &
energy, logistics, organizational, operational due
diligence, feasibility assessments, among
others.
CW Advisory is part of the CW Group, a leading
advisory, research and media boutique aligned
along three pillars: Advisory, Research and
Media, with headquarters in Greenwich,
Connecticut, USA.
advisory.cwgrp.com
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