CemProspects reports major developments in petcoke and freight

CemProspects reports major developments in petcoke and freight
08 October 2020

The CemProspects online conference continued yesterday by considering the major developments for the freight and petcoke markets going forwards.

Starting with freight, Guy Hindley of Howe Robinson noted that the orderbook for the dry bulk fleet has fallen to 61mdwt – a low which has not been seen since 2005. Dry bulk trade is expected to reach 6.2bnt in 2020, with petcoke and cement representing 12.5 per cent of the total.

The recovery of cement and petcoke trade in 2020 has supported the overall minor bulk trade segment. Total minor bulk trade is forecast to dip 1.6 per cent YoY in 2020 to 1.937bnt from 1.968bnt. However, cement saw 1.6 per cent YoY growth to 131Mt and petcoke increased 0.6 per cent to 64Mt.

Moving on to petcoke, Argus’ Lauren Masterson considered some overall trends for the market. At the start of 2020 fundamentals were strong as lower prices in 2019 drew more buyers into market, more cement plants switched from coal and India increased the percentage of petcoke in its fuel mix. However, global output of petcoke fell throughout the 1Q and into April.

As a result, the price of petcoke is now uncompetitive in India against various types of coal. Argus does expect prices to begin decreasing soon but will remain relatively steady going forwards. 

Ben Ziesmer, Advisian, continued the analysis by stating that petcoke production is not expected to meaningfully increase until 2021. Consumers are also less likely to switch back to petcoke next year unless the pricing becomes favourable. Mr Ziesmer also sees some permanent demand loss to alternative fuels.

Published under Cement News