argus petcoke mumbai jitendra roychoudhury 2016
TRANSCRIPT
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Use of Petroleum Coke ratherthan Coal in Current Market
Atmosphere
Jitendra Roychoudhury
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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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Coal Market Developments
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
Source: ICMW, KAPSARC Analysis
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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)
Source: ICMW, KAPSARC Analysis
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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