Nice, 16 May (Argus) – The supply of fuel-grade petroleum coke (petcoke) is forecast to increase by around 60pc over the next four years and could reach 200mn t, French cement producer Lafarge said today.
Global petcoke production was 130mn t in 2011 but will experience a far more rapid increase up to 2016 following an increase in demand and coking capacity from China, India and Latin America, Patrick Peenaert, vice president of solid fuels at Lafarge said at the McCloskey European Coal Outlook conference held in Nice, France. The petcoke market has grown an estimated 30pc between 2002 and 2010.
“The small size of this market means this increase will have a significant impact on the price of petcoke,” Peenaert said. “Coal is capping petcoke, which is discounted on average 25pc below coal price.”
Prices are expected to come down in the coming months as coal prices are under pressure and new coking capacity is coming on line, Peenaert said. “On other hand, the petcoke is a by-product strongly linked to the usage of light products linked, so production and demand will always increase,” he added.
Although most of the growth will come from Asia as India and China increase their light products consumption, a small increase is expected from the US. Last year, around 41pc of global production came from the US, followed by China with 20pc and Latin America (mainly Venezuela and Brazil) at 12pc. Canada represented 10pc with Europe making up just 3pc.
Production at the end of 2012 is forecast at 125mn t, with around 60mn t of this being high sulphur petcoke supplied to cement and power stations, Lafarge said.
While coal prices will continue to direct the market, freight will have an impact on price constitution for petcoke. “When freight starts to increase we notice a slow evolution in petcoke prices,” Peenaert said. “In a context of low freight, there is more room for petcoke to move and become attractive.”
Europe, Asia and Brazil will remain the lead importers of petcoke, while the US and Venezuela will dominate the export market, he added.
Lafarge's annual coal requirement is 10mn t, while petcoke is 3mn t.
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