Petroleum coke quality has been shifting in the US Gulf coast market over the last few months as refineries receive a higher volume of Venezuelan and Canadian crude while certain Mideast Gulf, Latin American and West African crudes have become less available.
A few refineries initially began making 4.5pc sulphur coke earlier this summer, likely because of the surge in imports of Venezuelan crude, which yields this grade when run on its own. But some of these refineries' coke sulphur content has crept up in recent weeks.
Valero's 215,000 b/d St Charles refinery in Louisiana and Chevron's 365,500 b/d Pascagoula refinery in Mississippi had been producing less than 5pc sulphur coke for the past few months, but are now back above 5pc sulphur or approaching 6pc, market participants said. Some refineries that had been in the 5-6pc range are now above 6pc.
It is not entirely clear what is driving the recent increase in sulphur content. US imports of Venezuelan crude have been steadily climbing since January, with US imports hitting 743,000 b/d in the first week of August, the highest weekly volume since August 2017, according to data from the US Energy Information Administration.
But imports of Canadian crude — which tends to make higher sulphur coke — were up by 4pc and 6pc, respectively, in July and the first three weeks of August compared with June levels. Reductions in crude from the Mideast Gulf, South America, West Africa and possibly some domestic light sweet crudes may also have contributed to the rise in sulphur.
Vanadium levels increase
Chinese market participants have also noticed an increase in vanadium content at some US Gulf coke, which they attribute to the increase in Venezuelan crude.
"The US is using Venezuelan oil now and all US-origin coke's vanadium content is increasing," one Chinese trader said. A US-based trader agreed, saying vanadium levels were "... going up everywhere."
The Chinese trader said that coke from Motiva's 640,500 b/d Port Arthur, Texas, refinery's DCU 1, which typically produces coke that can be used in anode blends, has recently tested at more than 1,000ppm vanadium. TotalEnergies' 238,000 b/d Port Arthur refinery's coke has recently had about 1,500ppm vanadium, up from 1,300ppm for a cargo that arrived in China in June, another trader said. Valero St Charles' vanadium is now also above 1,000ppm.
Some midcontinent anode-grade coke-producing refineries have also seen increases in vanadium over the past year, which is more likely because of higher Canadian crude runs, one market source said.
US Gulf Venezuelan runs to continue rising
The US plans to continue to increase the use of Venezuelan crude in its refineries in the coming years.
Chevron has agreed to spend more than $7bn over the next five years to double its production from Venezuela. And US president Donald Trump announced on 28 August that the US will take "majority control" of 65bn bl of Venezuela's oil reserves in partnership with unnamed private companies. Venezuelan acting-president Delcy Rodriguez on 29 August confirmed a plan to give the US a stake in about 20pc of Venezuela's oil reserves to help boost output by 1.5mn b/d. But US opposition party leaders say they plan to scrutinize the deal if they take power next year.
