Argus Petcoke Mumbai Jitendra RoyChoudhury 2016

7/25/2019 Argus Petcoke Mumbai Jitendra RoyChoudhury 2016

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Use of Petroleum Coke ratherthan Coal in Current Market

Atmosphere

Jitendra Roychoudhury


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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?


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Introduction: KAPSARCs

mission and structure



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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 andoutcomes

An independent non-profit research center focused on energyeconomics & policy


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Research Programs and Focus Areas


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A KAPSARC research paper

Discussion Papers

A short, 7-10 page, non-attributional,summary of a KAPSARC EnergyWorkshop

Workshop Briefs

Databases (such as policy dB,weather etc.) or tools such as

models (e.g. CGE model source codeor models for collective decision-making processes)

Tools and Datasets


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Cement growth constrained



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Cement production continues to grow

Source: Office of Economic Advisor

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

Governments infrastructure spending should push growth. Production capacity expected toreach 500 Mt by 2020.

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Cement Production (Mill Tons)


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Real estate and funding issues in infrastructure

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Cement Production (Mill Tons)

Recent events have affected monthly production drought, banks, infrastructure

Expectations remain strong on the back of a better monsoon

Source: Office of Economic Advisor


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Current thermal coal marketscenario



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Thermal coal is strong

Source: HDR Salva, ICMW

Strong domestic production, imports growth muted

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Thermal Coal Consumption (Mill Tons)

Domestic Production Imported Coal


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Coal production continues to grow

Source: ICMW, HDR Salva

Imports have declined as domestic production has increased and mine stocks utilized

Port stocks had risen as imports had languished.

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Imported Coal (Mt) Domestic Production (Mt) Mine Stocks (Mt) Port Stocks (Mt)


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Pet Coke Supply Scenarios



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Petroleum coke consumption grows

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Petroleum Coke Consumption (Mill Tons)

Petroleum Coke Production Petroleum Coke Imports

Increase in domestic pet coke production as refineries are using cheaper and heaviercrude oil.

Consumption rising as cement plants switch to higher cv pet coke. Railway logistics beingconstrained means using pet coke is a better option when compared to lower cv coal.

Source: ICMW, KAPSARC Analysis


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Additional Capacity on the Way

2012-13 2013-14 2014-15

IOC, Guwahati 55,000 61,000 60,000

IOC,Barauni 142,000 124,000 132,000

IOC, Koyali 606,000 681,000 761,000

IOC, Digboi 40,000 35,000 35,000

IOC, Panipat 885,000 978,000 869,000

IOCL, Bongaigaon 129,000 128,000 139,000

NRL,Numaligarh 65,000 67,000 93,000

MRPL, Mangalore - - 367,000

RPL, Jamnagar 2,873,000 2,799,000 2,844,000

RPL,SEZ 3,578,000 3,849,000 3,600,000

EOL, Vadinar 1,739,000 2,112,000 2,248,000

BORL, Bina 410,000 438,000 530,000HMEL, Bathinda 457,000 795,000 770,000

10,979,000 12,067,000 12,448,000

Current Capacity (t) Planned Capacity (t)

Source: MoPNG Stats, KAPSARC Analysis

Operational /Planned

CPCL (MRL), Manali 500,000

IOC, Paradip 1,250,000

NOCL, Cuddalore 400,000

BPCL, Kochi 1,300,000

IOC, Haldia 500,000

3,950,000

Pet coke capacity will increasefrom 12.44 Mt to 16.35 Mt

Need for transportation fuels willdrive further pet coke capacity

Source: MoPNG Stats, KAPSARC Analysis


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Imports show strong growth


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Petroleum Coke Imports (Mt)

Rising costs and squeezed margins in cement = pet coke imports


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Impact of global dynamics higher imports

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

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Petroleum Coke Imports (Mill Tons)



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Global Dynamics of pet coke

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U.S. Petroleum Coke Exports (Mbbl)

U.S. Exports to China U.S. Exports to Japan U.S. Exports to Brazil U.S. Exports to India

U.S. Exports to Turkey U.S. Exports to Mexico U.S. Exports to Spain

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

Source: U.S.EIA


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Pricing and GlobalDynamics



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Price Dynamics of pet coke

Supply dynamics, shale oil pet coke and Chinese rumours

Source: Platts


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Pet Coke and Coal pricing

Source: IHS

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


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Coal east coast ;transportation over acongested railway network

Cement plants widelydistributed near demandcenters as well as mines

Ports

widely dispersed butchallenge of congestion andevacuation

Fuel supply mix ofChallenges andOpportunities


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Opportunity - Supply glut may soften pet coke prices

U.S. Pet Coke

Saudi Pet Coke Pet Coke diverted fromChina, because of air

quality concerns

Increased domestic

production in India

Increase in LNG,heavier Canadian

crude, Shale oil


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Supply from US/Canada will continue; Shale oil produces mediumsulphur pet coke. Heavier Canadian crude is locked to US refineries;

Chinese uncertainty: Imposition of sulphur constraints in China will meanthat cargo might be diverted to India;

Increased pet coke production within India will mean that domesticavailability might start setting the price bottoms;

As Coal India continues to increase production, government might usepricing and policy to curtail pet coke imports; Commercial mining might

further affect the pet coke dynamics;

Implications


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Jitendra Roy [email protected] +966 11 290 3181www.kapsarc.org

Thank you for your attention

Documents

Argus Petcoke Mumbai Jitendra RoyChoudhury 2016