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US Gulf coast coke tightness unlikely to ease soon

  • Market: Petroleum coke
  • 07/01/25

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.


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02/02/25

Trump tariffs to hit North American energy trade

Trump tariffs to hit North American energy trade

Washington, 2 February (Argus) — US president Donald Trump is set to disrupt the integrated North American energy market with tariffs of 10pc on Canadian energy imports and 25pc on Mexico-sourced energy commodities, effective on 4 February. Trump on Saturday issued executive orders that would impose taxes of 25pc on all imports from Mexico and 25pc on all non-energy imports from Canada, effective on 4 February. Most energy commodities imported from Canada would be subject to a lower, 10pc tariff. Imported goods in transit before 12:01am ET on 1 February would not be subject to those levies. The Canada energy exemption applies to "crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water and critical minerals". Trump and the White House did not explain why he made a slight concession on the Canadian energy commodities. The US-Canada energy trade is particularly vulnerable to tariffs, for both sides. More than 4mn b/d of Canada's exports are wholly dependent on pipeline routes to and through the US. Conversely, many refineries in the US midcontinent have no practical alternative to the Canadian crude. Industry group the American Petroleum Institute said on Saturday that it would "continue to work with the Trump administration on full exclusions that protect energy affordability for consumers, expand the nation's energy advantage and support American jobs". Trump imposed tariffs on Canada and Mexico, as well as on China, by declaring a "national emergency" related to alleged inability of those countries to stem the flow of migrants and illegal drug fentanyl to the US. The White House in previous decades has used emergency declarations to impose sanctions against foreign countries, and US courts have stayed away from challenging the executive branch on such declarations and their economic applications. The choice of an emergency declaration also is meant to prevent the US Congress, which retains primary authority over US international trade, from intervening legislatively to remove tariffs. Congressional Republicans, at any rate, quickly hailed Trump's decision. By contrast, Democratic lawmakers and state officials denounced the tariffs and cited inflationary effects of the import taxes. Tit for tat Canada's prime minister Justin Trudeau said on Saturday that his country's energy exports to the US would factor in with other retaliatory measures, possibly in the form of export taxes. "There are a number of different industries and regions of the country that can have greater leverage over the US," Trudeau said. "One thinks of the oil industry for example." Alberta premier Danielle Smith said on Saturday that she would oppose efforts to ban or to tax exports to the US. Trudeau said he would hold consultations with regional and business leaders before taking any counter-measures. But he added, "no one part of the country should be carrying a heavier burden than another." Trudeau said that Canada would apply a 25pc import tax on C$30bn ($21bn) worth of imports from the US on 4 February, followed by a 25pc tariff on an additional C$125bn worth of imports on 25 February. Denouncing Trump's punitive tariffs and his frequent derogatory comments about the US' northern neighbor, Trudeau, in comments directed at a US audience, said: "From the beaches of Normandy to the mountains of the Korean Peninsula, from the fields of Flanders to the streets of Kandahar, we have fought and died alongside you." Mexico's president Claudia Sheinbaum likewise criticized Trump's action, characterizing as "slander" the text of his executive orders, which alleged that Mexico's government was an instrument of the country's drug cartels. But Mexico did not unveil specific countermeasures against Trump's tariffs. "I instruct the secretary of economy to implement Plan B, which we have been working on, including tariff and non-tariff measures in defense of Mexico's interests," Sheinbaum said on Saturday. Trump's executive orders call for raising US tariffs if Canada and Mexico retaliate. Effects to be felt across the economy The North American energy industry is an obvious casualty of Trump's trade war. But its effects will be felt in automobile manufacturing, agriculture, steel, aluminum, potash and every other sector of the economy in all three countries. Nearly all of Mexico's roughly 500,000 b/d of crude shipments to the US in January-November 2024 were waterborne cargoes sent to US Gulf coast refiners. Those shipments in the future could be diverted to Asia or Europe. Tariffs on imports from Canada and Mexico would most likely have the greatest impact on US Atlantic coast motor fuel markets. The tariffs may affect regional natural gas price spreads and increase costs for downstream consumers, but there is limited scope for a reduction in gas flows between the two countries — at least in the short term. Tariffs on Canadian and Mexican imports also will disrupt years of free-flowing polyethylene (PE) and polypropylene (PP) trade between the three countries, market sources said. North American steel trading costs could rise by as much at $5.3bn across the three nations, since Mexico and Canada are expected to issue reciprocal tariffs against the US, as it did when Trump issued tariffs in his first term. The tariffs could also disrupt US corn and soybean sales, since China and Mexico account for 48pc of US corn exports and 61pc of US soybean exports since 2019, according to US Department of Agriculture data. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump tariffs on Canada, Mexico to include oil: Update


31/01/25
News
31/01/25

Trump tariffs on Canada, Mexico to include oil: Update

Updates with comments from Trump, plan for 10pc crude tariff. Washington, 31 January (Argus) — President Donald Trump said late Friday he will proceed with plans to impose 25pc tariffs on imports from Canada and Mexico on 1 February, with crude imports likely to be taxed at a lower 10pc rate. Trump separately plans to impose tariffs on imports from China on 1 February. Asked if his Canada tariffs would include crude imports, Trump said, "I'm probably going to reduce the tariff a little bit on that," he told reporters at the White House. "We think we're going to bring it down to 10pc." Trump, who previously tied tariffs on imports from Canada, Mexico and China to their alleged inability to stem the flow of drugs and migrants into the US, today insisted that the tariffs he plans to impose on Saturday in fact have a strictly economic rationale and are non-negotiable. The tariffs expected on Saturday "are not a negotiating tool", Trump said. "No, it's pure economic … we have big deficits with all three of them." Trump, in a wide ranging gaggle with reporters, separately mentioned that he would impose tariffs on imported chips and oil and natural gas. "That'll happen fairly soon, I think around 18 February," he said. It was not clear from his remarks if he meant that all oil and gas imports into the US would be taxed, or if he referred to supply only from Canada and Mexico. Trump said he would also raise tariffs on imported steel, aluminium and eventually copper as well. Trump brushed away criticism of potential negative impacts from his tariffs. "You will see the power of the tariff," Trump said. "The tariff is good, and nobody can compete with us, because we have by far the biggest piggy bank." The looming face-off on tariffs has unnerved US oil producers and refiners, which are warning of severe impacts to the integrated North American energy markets if taxes are imposed on flows from Canada and Mexico. Industry trade group the American Petroleum Institute has lobbied the administration to exclude crude from the planned tariffs. Canadian prime minister Justin Trudeau reiterated today that Ottawa would retaliate against US tariffs. Mexican president Claudia Sheinbaum also said her country has prepared responses to US tariffs . Nearly all of Mexico's roughly 500,000 b/d of crude shipments to the US in January-November 2024 were waterborne cargoes sent to US Gulf coast refiners. Those shipments in the future could be diverted to Asia or Europe. Canadian producers have much less flexibility, as more than 4mn b/d of Canada's exports are wholly dependent on pipeline routes to and through the US. Canadian crude that flows through the US for export from Gulf coast ports would be exempt from tariffs under current trade rules, providing another potential outlet for Alberta producers — unless Trump's potential executive action on Canada tariffs eliminates that loophole. Tariffs on imports from Canada and Mexico would most likely have the greatest impact on US Atlantic coast motor fuel markets. New York Harbor spot market gasoline prices are around $2/USG, meaning a 25pc tariff on Canadian imports could up that price by as much as 50¢/USG. This could prompt buyers in New England or other US east coast markets to look to other supply options. Canadian refiners could also start sending their product to west Africa or Latin America. US refiner Valero said that the tariffs could cause a 10pc cut in refinery runs depending on how the tariffs are implemented and how long they last. Gas, petchems, steel and ags threatened The tariffs may affect regional natural gas price spreads and increase costs for downstream consumers, but there is limited scope for a reduction in gas flows between the two countries — at least in the short term. The US is a net gas importer from Canada, with gross imports of 8.36 Bcf/d (86.35bn m³/yr) in January-October, according to the US Energy Information Administration (EIA). The US' Canadian imports far exceeded the 2.63 Bcf/d it delivered across its northern border over the same period, EIA data show. Tariffs on Canadian and Mexican imports also will disrupt years of free flowing polyethylene (PE) and polypropylene (PP) trade between the three countries, market sources said. North American steel trading costs could rise by as much at $5.3bn across the three nations, since Mexico and Canada are expected to issue reciprocal tariffs against the US, as it did when Trump issued tariffs in his first term. The tariffs could also disrupt US corn and soybean sales , since China and Mexico account for 48pc of US corn exports and 61pc of US soybean exports since 2019, according to US Department of Agriculture (USDA) data. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump tariffs to hit Canada, Mexico, China on 1 Feb


31/01/25
News
31/01/25

Trump tariffs to hit Canada, Mexico, China on 1 Feb

Washington, 31 January (Argus) — President Donald Trump will proceed with plans to impose 25pc tariffs on imports from Canada and Mexico and 10pc on imports from China on 1 February, the White House said today. The White House pushed back on reports that the tariffs would be delayed and declined to confirm whether Trump made a decision on whether to exclude Canadian and Mexican crude from the tariffs. "Those tariffs will be for public consumption in about 24 hours tomorrow, so you can read them then," the White House said. The looming face-off on tariffs has unnerved US oil producers and refiners, which are warning of severe impacts to the integrated North American energy markets if taxes are imposed on flows from Canada and Mexico. Industry trade group the American Petroleum Institute has lobbied the administration to exclude crude from the planned tariffs. Trump on Thursday acknowledged a debate over the application of tariffs to oil but said he had yet to make a decision on exemptions. The White House dismissed concerns about potential inflationary effects of Trump's tariffs. "Americans who are concerned about increased prices should look at what President Trump did in his first term," it said. Canadian prime minister Justin Trudeau reiterated today that Ottawa would retaliate against US tariffs. Nearly all of Mexico's roughly 500,000 b/d of crude shipments to the US in January-November 2024 were waterborne cargoes sent to US Gulf coast refiners. Those shipments in the future could be diverted to Asia or Europe. Canadian producers have much less flexibility, as more than 4mn b/d of Canada's exports are wholly dependent on pipeline routes to and through the US. Canadian crude that flows through the US for export from Gulf coast ports would be exempt from tariffs under current trade rules, providing another potential outlet for Alberta producers — unless Trump's potential executive action on Canada tariffs eliminates that loophole. Tariffs on imports from Canada and Mexico would most likely have the greatest impact on US Atlantic coast motor fuel markets. New York Harbor spot market gasoline prices are around $2/USG, meaning a 25pc tariff on Canadian imports could up that price by as much as 50¢/USG. This could prompt buyers in New England or other US east coast markets to look to other supply options. Canadian refiners could also start sending their product to west Africa or Latin America. US refiner Valero said that the tariffs could cause a 10pc cut in refinery runs depending on how the tariffs are implemented and how long they last. The tariffs may affect regional natural gas price spreads and increase costs for downstream consumers, but there is limited scope for a reduction in gas flows between the two countries — at least in the short term. The US is a net gas importer from Canada, with gross imports of 8.36 Bcf/d (86.35bn m³/yr) in January-October, according to the US Energy Information Administration (EIA). The US' Canadian imports far exceeded the 2.63 Bcf/d it delivered across its northern border over the same period, EIA data show. Tariffs on Canadian and Mexican imports also will disrupt years of free flowing polyethylene (PE) and polypropylene (PP) trade between the three countries, market sources said. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US still eyes 1 February for Canada, Mexico tariffs


28/01/25
News
28/01/25

US still eyes 1 February for Canada, Mexico tariffs

Washington, 28 January (Argus) — President Donald Trump is still keen to impose tariffs on all imports from Canada and Mexico as soon as 1 February, the White House said today. Trump in multiple public comments since taking office on 20 January said he was still considering a 25pc tariff on Canada and Mexico, even though his administration has yet to provide any details on the proposal. Trump spent much of his meeting on Monday with Republican lawmakers at their annual retreat in Florida blasting Canada and Mexico over their allegedly unfair trade practices. Tariffs should become a key source of income for the US government, just as they were in the nineteenth and early twentieth century before being supplanted by income taxes, Trump told the lawmakers, who are looking at ways to extend tax cuts enacted during his first term and set to expire at the end of 2025. Trump also said he would impose tariffs on all imported computer chips, semiconductors and pharmaceuticals. Trump's messaging on China tariffs has been more mixed. He said last week he would go on with his initial plans to impose a 10pc tax on all imports from China, but he also said he preferred to avoid a trade war with Beijing. An executive order Trump signed on 20 January lays out a process suggesting timelines of June-July for imposing tariffs on the US' key trading partners, with no reference to the 1 February deadline. But Trump has the legal authority to impose tariffs on imports from any country by a variety of executive actions and with very short notice, as he demonstrated over the weekend during a high-profile confrontation with Colombia over deporting migrants from the US. Trump told the lawmakers on Monday that he expects to wield the threat of tariffs as a negotiating tool often, because even "a very strong country" like Colombia caved in to his demands. Canada and Mexico appear to be preparing for a protracted trade confrontation with the US if Trump follows through on his threat, with retaliatory measures targeting specific US products and companies. The looming faceoff has unnerved the US oil producers and refiners, which are warning of severe impacts to the integrated North American energy markets if taxes are imposed on flows from Canada and Mexico to the US. Industry group American Petroleum Institute is lobbying the Trump administration to exempt crude and other energy products from any tariffs he plans to impose. Trump last week shrugged off the arguments from the US energy industry about potential negative impacts from confronting Canada and Mexico. "We don't need their oil and gas," Trump said. "We have our own, we have more than anybody." Almost all of Mexico's roughly 500,000 b/d of crude shipments to the US through November are waterborne, targeting Gulf coast refiners, and can be diverted to Asia or Europe. Canadian producers have much less flexibility — more than 4mn b/d of Canada's exports are wholly dependent on pipeline routes to and through the US. Only around 900,000 b/d can be directed away from the US via the recently expanded Trans Mountain pipeline system to the Pacific coast, although late-2024 flows were actually closer to 400,000 b/d, split evenly between the US west coast and Asia. Conversely, many refineries in the US midcontinent have no practical alternative to the Canadian crude. US gasoline prices would move higher by 30-70¢/USG if the 25pc tariffs that Trump has threatened were applied to Canada's oil, Canada's TD Bank projects. Trump's commerce secretary nominee Howard Lutnick will face a confirmation hearing at the Senate Commerce committee on Wednesday, with trade wars likely to feature high among the questions lawmakers direct at him. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US mid-sulphur coke’s premium may widen


27/01/25
News
27/01/25

US mid-sulphur coke’s premium may widen

Houston, 27 January (Argus) — The premium for US fuel-grade mid-sulphur petroleum coke over high-sulphur coke could widen in the coming weeks because of the planned shutdown of a mid-to-high-sulphur coke producer. Fob US Gulf coast mid-sulphur coke's premium to the high-sulphur specification has remained slim, at around $4/t since 18 December. This is largely because of limited demand from countries that place more value on sulphur content, including Turkey and China, particularly as coal prices have fallen . Some US Gulf refineries have also been producing coke with lower-than-typical sulphur levels, possibly because crude slates shifted after heavy sour crudes, especially from western Canada, gained in price, partly on the effect of the opening of the 590,000 b/d Trans Mountain Expansion pipeline exporting this crude by sea . Prices for US sour crudes, like US Gulf medium sour Mars, have been higher as well . This has likely shifted refineries away from these grades toward lighter, sweeter crudes, which tend to produce cokes with lower sulphur contents. Heavy sour Western Canadian Select (WCS) crude's discount to the light sweet Nymex calendar month average (CMA) crude benchmark in Houston narrowed to $2.88/bl on 23 December, its narrowest discount in 2024. But the discount for WCS to CMA Nymex has since grown to $4.70/bl as of the latest assessment on 24 January. And some refineries' coke fell in sulphur content because of refinery upsets that necessitated a change in feeds. Each of these factors could make the increase in mid-sulphur supply temporary. The premium may also widen because LyondellBasell's 264,000 b/d Houston refinery, which produces a mid-to-high-sulphur coke, is shuttering operations starting this month. The Houston refinery has a marketable coke production capacity of 5,500 t/d, making it the seventh largest coke producer in the US Gulf coast, according to the US Energy Information Administration. LyondellBasell's move to shut the Houston refinery may encourage other refineries to increase run rates, as the closure should boost refining margins . Since most US Gulf refineries produce higher sulphur coke, higher run rates at the remaining facilities would likely increase high-sulphur supply, pushing these prices lower and widening the spread. Much of the recent jump in US Gulf coke prices has been because of tight spot supply . There are also signs of recovering demand in the Chinese market, as lower-sulphur anode-grade coke prices have surged and buoyed prices for lower-sulphur fuel-grade coke. China's market participants are also more widely considering US mid-sulphur coke as new US president Donald Trump has potentially softened his anti-China rhetoric , with no new shots fired in the US-China trade war for the time being. Many Chinese traders shied away from US coke following Trump's election in November . 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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