Market overview: From January to October of 2022, the overall performance of China’s petroleum coke market is good, and the price of petroleum coke presents a trend of “rising – falling – stable”. Supported by downstream demand, the price of petroleum coke in the later stage has fallen, but it is still at a historical high. In 2022, petroleum coke supply increased slightly from the previous quarter. However, due to the impact of the Winter Olympic Games, soaring international crude oil prices, and epidemic prevention and control, refineries cut production in the first quarter ahead of schedule. Production recovered gradually in the second quarter, while a large number of petroleum coke imports, medium and high sulfur supply increased, low sulfur coke supply is still tight. The production of electrolytic aluminum in the lower reaches of the river generally maintained growth, and the power cut in Sichuan, Yunnan and other local areas resulted in reduced production, and the aluminum price was generally stable. Weak demand for carburizer, graphite electrode, and surging demand for anode materials have led to price differentiation of medium and low sulfur petroleum coke in local areas. Fuel petroleum coke has been greatly affected by the international market. The high-sulfur coke used in cement and other industries has been hanging upside down for a long time. The import of high-sulfur fuel coke from traditional Saudi Arabia and the United States has decreased, but the import of Venezuelan petroleum coke has been supplemented by a large number of imports.
Price action
I. Medium and high sulfur petroleum coke: From January to October 2022, the market price of petroleum coke in China showed an overall trend of “rising – falling – stable”. As of October 19, the reference price of petroleum coke was 4581 yuan/ton, up 63.08% compared with the beginning of the year. From January to April, due to a number of factors, such as production restrictions during the Winter Olympics, transportation restrictions due to the epidemic control, and soaring global energy prices affected by the Russia-Ukraine crisis, refining costs of refineries increased as a whole. As a result, the coking units of many refineries reduced production, and some refinery units stopped maintenance in advance. As a result, market supply decreased significantly and coke prices rose significantly. In addition, some refineries along the river supply negative production of sulfur petroleum coke, the price of petroleum coke gradually increased under the same index; Since May, the coking units that had been shut down and reduced production have resumed production successively. However, in order to reduce costs, some refineries have purchased low-price crude oil for production. As a result, the overall petroleum coke index in the market has deteriorated, and a large amount of imported petroleum coke has arrived at the port, mainly importing medium-high sulfur petroleum coke from Venezuela, the United States, Russia, Canada and other countries. But mainly in vanadium. 500PPM of medium and high sulfur petroleum coke, and domestic downstream aluminum industry has successively controlled the trace elements, high vanadium (vanadium > 500PPM) the price of petroleum coke fell sharply, and the price difference between low vanadium and high vanadium petroleum coke gradually widened. Since June, as the price of petroleum coke continues to fall, downstream carbon enterprises have successively entered the market to purchase. However, as the price of raw petroleum coke remains high for a long time this year, the downstream cost pressure is greater, and most of them purchase on demand, and the price of medium and high sulfur petroleum coke maintains a shock operation.
Ii. Low-sulfur petroleum Coke: From January to June, the anode material capacity expanded, the market demand increased sharply, and the demand for low-sulfur petroleum coke increased significantly. In April, affected by the expected shutdown of CNOOC refinery for maintenance, the price of low-sulfur petroleum coke continued to stay high; From July, high temperature power rationing, the downstream steel mill market performance is poor, production reduction, production suspension, downstream graphite electricity should be this situation, more production reduction, part of the shutdown, negative material market low sulfur petroleum coke price support is limited, low sulfur coke price fell sharply; Since September, the National Day and Mid-Autumn Festival have arrived one after another. The downstream stock has supported the low sulfur coke price to rise slightly, but with the arrival of the big 20, the downstream receive the goods cautiously, and the low sulfur petroleum coke price has kept steady, and some adjustments have been made.
In terms of fuel coke, in 2022, global energy prices will soar, external prices will remain high and volatile for a long time, the long-term cost of high-sulfur pellet coke will be inverted, the import of high-sulfur fuel coke from Saudi Arabia and the United States will decrease, and the price of Venezuelan petroleum coke will be relatively low, so the import will supplement the market. The price of low sulfur projectile coke is high, and the demand indicator of petroleum coke in the glass fuel market has been adjusted.
The supply side
1. The capacity of delayed coking units increased slightly from January to October in 2022. The capacity change was concentrated in September, when a set of 500,000 tons/year coking unit in Shandong was suspended and a set of 1.2 million tons/year coking unit in Northwest China was put into production.
Ii. China’s petroleum coke production in January-September 2022 increased by 2.13% compared with that in January-September 2021, in which the self-consumption totaled 2,773,600 tons, an increase of 14.88% compared with that in the same period in 2021, mainly because the production capacity of two new coking units in Shandong was put into operation and resumed in June 2021 and November 2021, respectively. Petroleum coke supply in the market increased significantly; However, throughout the whole year, the increase of petroleum coke production is mainly in the medium and high sulfur petroleum coke, mainly due to the soaring crude oil price and the increase of refining cost of refineries. Some refineries use low-price crude oil to reduce the cost, and the petroleum coke is used as a by-product of the coking unit, which indirectly leads to the deterioration of the overall index of the petroleum coke market. According to the statistics of Yinfu, the production of medium and high sulfur petroleum coke in January-September 2022 increased by 2.38% compared with that in January-September 2021.
Iii. The amount of imported petroleum coke from January to August 2022 is 9.1273 million tons, a year-on-year increase of 5.16%. According to Bacuan Yinfu, the amount of imported petroleum coke is expected to continue to increase from September to the end of the year, and the supply of imported petroleum coke is expected to continue to increase.
Demand side
I. In terms of aluminum carbon market, the price of electrolytic aluminum at the end of the line has fluctuated to between 18,000-19000 yuan/ton, and the overall profit space of the electrolytic aluminum industry is still there. The downstream aluminum carbon market starts to operate at a long-term high level, and the overall market has a good demand for petroleum coke. However, it is subject to the sales mode of “one price adjustment in a month”, coupled with the long-term high price of raw petroleum coke, resulting in greater cost pressure and mainly on-demand procurement.
The downstream graphite electrode market is mainly purchased on demand. From July to August, due to the impact of high temperature, some steel markets cut production or stopped production. The supply side of graphite electrode enterprises reduced production, resulting in a significant decline in the demand of graphite electrode market. Carburizer market demand is stable; The state strongly supports the development of the new energy industry. The production capacity of the anode material market has expanded rapidly, and the demand for petroleum coke has increased significantly. In order to save costs, some enterprises have developed new processes to replace low-sulfur petroleum coke with medium-high sulfur petroleum coke, thus reducing costs.
Iii. In terms of fuel coke, the global energy price in 2022 has soared, the external price has been high and volatile for a long time, the long-term cost of high-sulfur pellet coke is inverted, and the market transaction performance is average, while the market of medium-low sulfur pellet coke is stable
Future market forecast
1. From the perspective of petroleum coke supply, the petroleum coke market supply is expected to continue to increase, and the capacity of newly built coking units in the later stage is put into production successively. It is expected that medium and high sulfur petroleum coke will dominate, but most of them are expected to be used for self-use, which will provide limited supplement to the market. Domestic enterprises’ demand for petroleum coke will continue to increase, and the amount of imported petroleum coke is expected to continue to grow.
2. From the perspective of downstream demand, Bachuan Yinfu predicts that the demand for petroleum coke in the downstream industry will continue to increase by the end of 2022 and 2023. Under the influence of international tension and the subsequent decrease of crude oil production by Saudi Arabia and Opec, the crude oil price is expected to remain high, the cost segment is well supported, and the downstream electrolytic aluminum production is expected to continue to increase, and the overall demand for petroleum coke in the industry continues to show a growing trend. Anode material market new investment is rapid, the demand for petroleum coke is expected to continue to increase; The price of coal is expected to fluctuate within a controllable range under the influence of national macroeconomic policies. The market demand for glass, cement, power plants, electrodes and carburizing agents is expected to remain average.
3. The epidemic prevention and control policies are expected to still exert a great influence in some areas, mainly restricting automobile transportation. The combined power rationing and energy consumption control policies are expected to still have an impact in some areas, and the overall impact on the market is expected to be limited.
Overall, it is expected that the end of 2022 and 2023 petroleum coke prices will remain high and volatile. It is expected that the main price range of petroleum coke is 6000-8000 yuan/ton for low sulfur coke (about 0.5% sulfur), 3400-5500 yuan/ton for medium sulfur coke (about 3.0% sulfur, within 500 vanadium), and medium sulfur coke (about 3.0% sulfur, vanadium > 500) price 2500-4000 yuan/ton, high sulfur coke (about 4.5% general goods) price 2000-3200 yuan/ton.
Post time: Nov-14-2022