Cemex expects coke prices to continue to fall

Market: Petroleum coke
28/10/24

Mexico-based multinational cement maker Cemex expects its energy costs, including for fuel like petroleum coke, will continue to decrease in the fourth quarter, in line with a trend of decreasing prices since the third quarter of 2023.

The cement maker's fuel costs declined by 23pc during the January-September period compared to the same period last year on a per tonne of cement basis, the company said today. Less volatile and relatively low prices for coke compared with recent years were a major underlying factor, with Argus' 6.5pc sulphur fob US Gulf coast coke assessment averaging $63.72/t during the January-September period, down by 37pc from the same nine months in 2023. The company also attributed the decline in fuel costs to "the increased use of lower cost and lower carbon fuels" and a "continued reduction in clinker factor."

"We have seen this cost trending down since the third quarter of 2023 and expect this to continue through year-end," Cemex chief financial officer Maher Al-Haffar said.

Cemex maintained its full-year 2024 guidance for a high single-digit percentage decrease in the energy cost per tonne of cement produced compared with 2023.

But the cement maker adjusted its guidance for full-year cement sales volumes downward from its second quarter projections. Cemex now anticipates a low single-digit percentage decrease on the year in full-year 2024 cement volumes instead of the flat to low single-digit increase it guided for in the second quarter.

Cemex's cement sales volumes decreased by 4pc to 11.25mn t in the third quarter compared with the same period last year. Inclement weather in the US and in Mexico disrupted the cement maker's sales volumes, with precipitation totals in parts of both markets rising by more than half from the third quarter of 2023. Cemex estimates that 50pc of the third-quarter decrease in cement volumes in the US and 40pc of the drop in cement volumes in Mexico was related to poor weather.

In Europe, third-quarter cement sales volumes increased by 2pc on the year after nine quarters of consecutive decline, as lower interest rates and improved economic activity drove more demand for construction.

The company's revenue totaled $4.09bn in the third quarter, down by 6pc from the same quarter in 2023.

Investment in growth focused on US

Cemex is increasing its investments in developed markets, particularly in the US and in Mexico, with plans to make bolt-on and margin enhancement investments in addition to small and mid-sized mergers and acquisitions.

Part of the funding for the investments comes from the company's plans to sell some plants, with $2.2bn worth of divestments expected to close before the end of the year.

Cemex completed the sale of its Guatemala plant in September, boosting the company's earnings in the third quarter.

Even so, the cement maker's profit totaled $1.34bn in the third quarter, down by 10pc from the same period last year.

The company's narrower focus on the US comes as multinational cement maker Holcim is preparing to spin off and list its North American business in the US in 2025. But when asked about the possibility of listing its North American business in the US, Cemex said it "would prefer not to speculate on whether we're looking at a particular strategy versus another at this point in time."

By Delaney Ramirez

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07/01/25

US Gulf coast coke tightness unlikely to ease soon

Houston, 6 January (Argus) — US Gulf coast petroleum coke supply is tight and unlikely to increase in the coming months because of a refinery closure and a river navigation disruption, as well as weak coking economics, potentially keeping prices from dropping in the near term. Although US Gulf coast coke prices had been dropping steadily since mid-April on lower demand, prices began rising in mid-October as supply tightened and demand for early 2025 cargoes picked up on wide discounts to coal.The higher demand for spot coke arriving early this year led the US Gulf coast 6.5pc sulphur coke assessment to rise to $67/t fob on 31 December, up by $17/t from 16 October. Although demand for high-sulphur fob US Gulf coast coke is ebbing from major destinations like India and Turkey, and buyers in China remain mostly uninterested, prices may continue to receive support from lower supplies in the first quarter and possibly beyond. Premiums for term contracts picked up toward the end of the year as buyers began to process how tight supply was looking for 2025, especially with a key US Gulf refinery set to close in the first quarter, one market participant said. Refiner LyondellBasell's 264,000 b/d Houston, Texas, refinery is scheduled to begin a staggered shutdown in January, with the last crude distillation unit at the plant expected to shut by February. The refinery, which has a 100,500 b/d delayed coker, typically produces mid-to-high-sulphur petroleum coke. And in the midcontinent, coke from Citgo's 184,000 b/d Lemont, Illinois, refinery will only be shipping until 15 January because of planned maintenance on a river lock. The Illinois River's Lockport lock will be fully closed from 28 January to 25 March for repairs, blocking the Lemont refinery's coke from shipping to export terminals for the majority of the first quarter. This will likely mean three fewer cargoes will be made available to US Gulf coast coke buyers from Citgo's Lemont refinery than usual in the first three months of the year, although this will lead to additional volume available in the second quarter and potentially early third quarter. Other coke-producing refineries in the midcontinent will not be affected by the Lockport lock closure. Meanwhile, overall coking economics are relatively weak, discouraging refiners from running coking units at full capacity. The Argus -calculated US Gulf coker yield — a measure of the total value of products from a coker — averaged $384/short ton from 1 November-6 December, at parity with the fob US Gulf coast asphalt price, potentially incentivising refiners to sell asphalt instead of running feed through their coker units. The coker yield rose to $405/st on 3 January, $20/st above the fob US Gulf asphalt price. But this is a narrower spread than in the same week a year prior, when the coker yield was $25/st above the asphalt price. Coker economics are also under pressure from a shortage of residual fuel oil, a coker unit feedstock. This product will probably remain in tight supply this month because some US refineries are scheduled to undergo crude distillation unit maintenance. And US residual fuel oil supplies are likely to face a challenging year even after the refinery works wrap up, because the US' fuel oil imports from Mexico are expected to fall as Mexican state-owned Pemex's 400,000 b/d Dos Bocas refinery ramps up operations. The refinery, which began starting up in August , will take a greater share of Mexican Maya crude, a grade that yields a substantial portion of fuel oil when refined. This will mean less Maya will be available for import to the US. In addition, the refinery's coker, which has a coke production capacity of 2-2.5mn t/yr, will also consume some of Pemex's excess fuel oil, curbing shipments to the US. By Delaney Ramirez Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Viewpoint: Trade war may upend US coke prospects

31/12/24

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31/12/24

Viewpoint: Trade war may upend US coke prospects

Houston, 31 December (Argus) — A possible renewed and expanded global trade war in president-elect Donald Trump's second term could lead to retaliatory tariffs from the US' major petroleum coke export destinations, pressuring US Gulf coast coke prices and adjusting trade flows. Trump campaigned on plans to impose tariffs of up to 60pc on imports from China , reviving memories of his trade policies in 2018 and 2019 that chilled coke trade with the country. He has also threatened to add 25pc tariffs on imports from Canada and Mexico, and up to 20pc on imports from all other countries. It is far from certain Trump will follow through on all his tariff threats once he does take office, or that they will be as large as he has promised. But if he does, China could repeat its retaliatory response to the prior Trump tariffs. And if other countries join in on those retaliatory measures, US coke exporters could face even more challenging conditions than in the past. First term fight In June 2018, the Trump administration announced plans for a 25pc tariff on what was then $34bn/yr of Chinese imports. Later that month Beijing retaliated, announcing a punitive 25pc tariff on US exports of fuel and calcined coke, thermal and coking coal and many other products. Total tariffs on greater-than-3pc-sulphur green coke, the US' largest grade exported to China, ultimately reached 33pc. The dueling tariffs led to significant shifts in US Gulf high-sulphur coke markets. Green coke exports from the US Gulf coast to China dropped by nearly 60pc year over year in 2018 to 638,000t, according to Global Trade Tracker (GTT) data, as no US Gulf coke shipments loaded for China from July-October. US Gulf export volumes to China stayed nearly flat in 2019 before surging back to 1.8mn in 2020 after China began issuing exemptions for its green coke tariff . US Gulf high-sulphur coke prices also started to fall sharply late in the third quarter of 2018 after China's retaliatory tariff came into effect in late August , while Indian and Turkish demand also fell. The average price of US Gulf 6.5pc sulphur coke dropped significantly in 2019, down by $27/t year over year. US coke exports to other countries were also hurt during that time. Turkey imposed a tariff on US-origin coke imports in 2018 after Trump doubled tariffs on Turkish steel and aluminium imports. US Gulf coke exports to Turkey fell by almost 50pc in 2019 compared with the year prior. Although some analysts think it is unlikely China will retaliate to tariffs as aggressively as it did during the first Trump term, Beijing would likely still target select industries. Coke could be high on this list, as these tariffs are still officially in effect and the government could easily withdraw the exemptions it has issued since 2020. A wider battlefront Trump's threat to issue tariffs against other countries in his second term, including 25pc tariffs on imports from top US trading partners Mexico and Canada, could lead to even more challenges. Already, Canadian prime minister Justin Trudeau and Mexican president Claudia Sheinbaum have indicated that they could retaliate if the US goes through with Trump's plans. While Canada has only taken about 800,000 t/yr of US coke since 2021, Mexico has been a large consumer. The US' southern neighbor has been the fourth-largest offtaker of US Gulf coast coke so far this year. It was the largest in 2018 and 2021 and second-largest in 2019 and 2020, helping to absorb some of the lost demand from China, alongside India, Brazil, Turkey and Italy. India has typically been the biggest offtaker of US Gulf coke in recent years, and it has increased its share of US Gulf exports to 24pc in January-October of this year from 14pc in 2022. This step-up in US coke shipments to India followed a significant drop in China's higher-sulphur fuel coke demand over the past two years, especially since the government began signaling in late May that it would limit its consumption , as well as an increase in Indian cement makers' use of coke in their kilns . While India is likely to absorb even more US Gulf coke if Chinese demand declines further, India already took 20pc more of this coke in 2023 than it did in 2019. This suggests that new buyers may have to come into the market for the potential overhang in next year's US Gulf coast supplies to be worked down. This will only occur if US coke remains at a wide discount to coals from countries like South Africa, Australia and Indonesia in order to encourage more coal consumers to make the switch to coke. If a wider trade war results in India implementing tariffs on US coke, sellers might prefer to sell to other destinations, particularly in the Atlantic basin, rather than discounting coke deeply enough to draw more Indian demand. No help from Europe But while European countries like Italy, Spain, France and Greece were top importers of US Gulf coke in 2018 and 2019 when Chinese demand dropped, these countries are not as well-positioned to absorb more coke now. Cement makers in the region have invested in alternative fuels over the last few years as the EU Emissions Trading System has increased the price of carbon emissions, lowering their overall appetite for fossil fuels. The US exported 31pc less coke to Europe in 2023, at 4.4mn t, than it did in 2018, at 6.4mn t. By Hadley Medlock and Lauren Masterson Top USGC coke export destinations 2017-2020 mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: Policy uncertainty dogs battery anode plans

30/12/24

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30/12/24

Viewpoint: Policy uncertainty dogs battery anode plans

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But on 21 November, the company filed for Chapter 11 bankruptcy protection in the US , in part because of difficulties "bridging financing between different stakeholders", outgoing chief executive Peter Carlsson said. The company had already closed down its R&D facility in the US and put plans for factories in Canada, Germany and Sweden on hold. Its financial woes intensified after the Swedish government declined to invest. Other European governments have already reduced financial support for EVs, more for spending reasons than policy, which has softened demand in the region. France recently changed eligibility requirements for subsidies , and Germany ended its subsidy late last year. Some companies, like Norwegian battery materials company Vianode, have been planning multi-billion dollar investment programmes to expand their reach in the automotive industry throughout North America and Europe. It is not clear if Trump's election will have an effect on these plans. Vianode opened its first anode graphite production plant, Via One, in Herøya, Norway, in October. The plant will have a capacity of 2,000 t/yr, enough to supply 30,000 EVs annually, according to Vianode. Chinese firms have scaled up production of key battery materials at all stages of the supply chain, creating more competition for European and US producers. Chinese producers dominate the global EV market with about 70pc of market share, even as the EU and US have put policies in place to try to support their domestic industry. China's lithium-ion battery exports to the US jumped in November as suppliers looked to get ahead of potential new tariffs. The Trump administration is likely to increase tariffs on Chinese lithium-ion batteries to as much as 60pc in the coming few months after Biden earlier this year lifted them to 25pc from 7.5pc. This could help support US-based battery plants. But tariffs on Chinese goods could also present additional challenges, as the raw materials for synthetic graphite often have some Chinese components. Needle coke, traditionally the main raw material for synthetic graphite used in battery anodes, is not widely produced outside of China. And while companies in China have been researching options for using a wider range of petroleum coke qualities , specifications are still relatively narrow, with battery companies in China absorbing most of the world's suitable coke . One graphite anode plant in Europe has been struggling to procure petroleum coke, according to a market participant. Sourcing coke for synthetic graphite in Europe and other ex-China locations is likely challenging, as most of these refineries and calciners have tied up their supply in long-term commitments, one producer said. Refineries are also reducing coke production, as the required feedstocks have become more costly. By Lauren Masterson and Hadley Medlock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: Syrian rebuilding may boost Turkish cement

23/12/24

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23/12/24

Viewpoint: Syrian rebuilding may boost Turkish cement

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US Congress passes waterways bill

19/12/24

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19/12/24

US Congress passes waterways bill

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