Higher coal may drive mid-sulphur coke demand

: Petroleum coke
24/10/15

The premium for mid-sulphur petroleum coke on an fob US Gulf basis may widen again as higher coal prices push Turkish cement makers to this grade in order to remain within overall sulphur limits.

Mid-sulphur coke could begin to be more actively traded in Turkey as buyers there seek to reduce the amount of coal in their fuel mix, with coke becoming much more price competitive, a cement producer said.

Most Turkish cement plants can now use higher sulphur coke, but in order to do so, they must use a higher proportion of coal to meet emissions limits. And the number of coal trades has fallen sharply in the second half of the year.

Coke's discount to coal on a delivered basis has widened as coke prices have steadily fell and coal prices rose. Cfr Turkey 5.5pc sulphur dry basis coke reached a 38pc discount to coal on a heat-adjusted basis as of Argus' last weekly fuel-grade coke assessment, compared with a 31pc discount a month before and a 10pc discount during the same week last year. Both mid- and high-sulphur coke in Turkey are now at their widest discount to coal since 16 March 2022.

Cement plants were already starting to prefer mid-sulphur over higher-sulphur material because the premium has narrowed to a multi-month low. Since the start of October, mid-sulphur coke's premium to high-sulphur coke has remained at $2.50/t in Turkey, the lowest since 27 March.

The 5.5pc sulphur coke's average premium to 6.5pc sulphur on a cfr Turkey basis declined by 65pc on the year from January-September, to $4.98/t. This is slightly narrower than the premium for 4.5pc as received coke on an fob US Gulf basis, but this has also traded at a historically narrow premium to high-sulphur coke so far this year. The fob Gulf premium averaged $5.47/t year-to-date through September, falling by more than half from the same nine-month period last year. And last week it narrowed to its lowest since late August, after the 4.5pc sulphur assessment fell by $1.50/t on the week while 6.5pc sulphur prices held steady for the first week since 21 August, as spot demand emerged.

The lower premium is a result of weak demand for mid-sulphur coke outside of the Mediterranean as well as higher supply of 4.5pc sulphur Venezuelan coke over the past two years. This coke still attracts demand in Turkey, India and China despite US sanctions on Venezuela's oil industry. But Chinese demand for mid-sulphur fuel coke has sputtered since last year as stocks there have climbed, leading Mediterranean buyers to lower bids, feeling that suppliers have limited options elsewhere.

Some cement plants in Turkey have been lowering bids for 5.5pc sulphur coke even further to below $80/t cfr, basically in line with high-sulphur prices, which were assessed at $77.50/t last week. Two cement plants already achieved this price level for 5.8pc sulphur max coke earlier this month, purchasing a joint cargo at about $77-78/t cfr.

It remains to be seen if the stronger interest in mid-sulphur coke from Turkish buyers reverses the trend of a falling spread between the two grades of coke. At least two firms this week are seeking seaborne mid-sulphur coke cargoes for November-December loading.

By Alexander Makhlay

Mid- to high-sulphur coke premiums $/t

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25/06/18

Freights rise on war risk, pressure coke fob

Washington, 18 June (Argus) — Rising dry bulk freight rates driven by concerns around Israel's attacks on Iran are weighing on fob US Gulf prices for petroleum coke and boosting cfr prices, despite overall weak demand. "Freight [rates] are extremely strong, and this is putting heavy pressure on the fob prices," one trader said. "Freights for the next weeks are crazy." "You have almost a 10pc jump up in freights in the last three trading days," another trader said, as the freight market reacted to Israeli strikes against Iran that began on 13 June, sparking concerns over Middle East oil supply and the possibility of an additional war risk premium on marine insurance. Bunker prices in Fujairah, UAE, the world's third-largest marine fuels hub, have surged . Supramax freight rates from the US Gulf to India, one of the most common routes for petroleum coke, increased by $4-$5/t since last Thursday, while other shorter key routes, like the US Gulf to Turkey, have risen by $2-$3/t, according to multiple coke market participants. The Argus Supramax freight rate from the US Gulf to west coast India rose to $41.45/t on 16 June, up from $38.10/t on 12 June, while the US Gulf to Turkey rate jumped to $27/t from $24.05/t. Freight rates were already rising prior to the start of the conflict. "A month ago, there were a ton of ships in the Gulf, but a lot of those ships have been repositioned," a third trader said. "Vessel supply is not as healthy as it was a month or two ago." The additional concerns around marine insurance and higher bunkers are contributing to a "sugar high" among vessel owners, pushing them to raise offer levels as they feel confident in their positions for the time being, the third trader said. The increase has resulted in a jump in offer prices for US Gulf coke in India, and some deals have been heard done at significantly higher levels than in the latter half of last week. US Gulf coke sales were heard in the $106-$107/t range on a cfr west coast India basis in recent days, up from deals in the $100-$103/t range prior to 13 June. But many traders said these higher levels are not necessarily repeatable, as most large Indian buyers have not raised bids from the low-$100s/t. It is unlikely that Indian buyers will absorb the full increase in freight rates, since many are already adequately covered with fuel inventory, and coal prices are increasingly competitive. This means that sellers will need to lower expectations on an fob US Gulf basis to keep trade flowing. Traders will likely absorb much of the fob price impact, as they are holding most prompt cargoes at the moment. US Gulf high-sulphur supply is fairly tight , which is providing support to fob levels. "The thing is, if you call the refiners and ask for something, either they're not going to have it or it'll be higher" than Argus' last assessment on 11 June of $68/t for US 6.5pc sulphur fob US Gulf coke, the third trader said. "But nothing is netting back to $68 in any market right now when you take the freights into account." High-sulphur supply from Saudi Arabia was also already tight, and the tensions in the region could further disrupt shipments, especially from the Saudi Aramco-TotalEnergies Satorp joint venture 460,000 b/d Jubail refinery, located across from Iran on the country's eastern coast. Shipments from this refinery must move through the strait of Hormuz, a narrow waterway between Iran and the UAE, which some worry Iran could potentially block. Vessel owners are already looking to avoid traveling to this region . By Lauren Masterson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Lighter crude slates cut US Gulf HS coke supply

25/06/11

Lighter crude slates cut US Gulf HS coke supply

Houston, 11 June (Argus) — US Gulf coast high-sulphur fuel-grade petroleum coke spot availability has tightened in recent weeks as sulphur content and overall coke output have dipped because of lighter crude slates. US Gulf coke production is down by 15-25pc on account of refineries using lighter crudes, according to multiple sources. "Overall spot availability of cargoes from US refineries is low," one trader said. At least three or four refiners in both Texas and Louisiana that would typically produce 6.5pc sulphur fuel-grade coke have been producing closer to 5pc sulphur or less because lighter crudes tend to be sweeter, specifically cutting high-sulphur availability. US Gulf sour crude prices have risen so far in June because of low supply, a halt to Chevron's Venezuelan crude imports and concerns surrounding Canadian wildfires . July Mars was at about a $1.40/bl premium to US benchmark WTI at the Cushing hub in Oklahoma last week, about 30¢/bl higher than a week earlier and $1/bl firmer than at the start of the trade month, encouraging refiners to buy more light, sweet domestic crudes. Sour crudes tend to be heavier and contain more of the Conradson carbon that makes up petroleum coke. "WTI is pretty cheap right now," a second trader said. "Many refineries are using that, and it's a lighter crude." The threat of high US tariffs on Canadian and Mexican crude imports earlier in the year may have also encouraged refiners to switch away from these crudes, which make higher volumes of 6.5pc sulphur coke. Refiners may be taking more Latin American crudes, which tend to produce lower sulphur content coke. Colombian Castilla Blend and Vasconia have climbed by $3-$4/bl against WTI this year because of higher demand, and Colombia's crude exports to the US reached a five-month high in April, according to Kpler data. US Gulf coast asphalt prices have also been higher than coker yields in recent weeks, which may be contributing to lower coke production. Asphalt production has declined because of a narrow light-heavy crude spread, partly caused by the limited sour crude availability, and refinery outages in the first quarter. Coker yields have been below asphalt values for 10 consecutive weeks, with the Argus -calculated coker yield holding a $14.50/short tonne discount to Gulf asphalt on 6 June. Traders seeking replacement high-sulphur supply could be further tightening the fob US Gulf spot market. Traders receiving mid-sulphur under high-sulphur contracts are looking to sell that supply into the mid-sulphur market at a higher return, rather than use it to fulfil contractual obligations for high-sulphur coke. "If I expected to get 6pc and I get 4.5pc, I'm going to go into the market and buy 6pc," another trader said. This may explain why some recent refiner sales have gone at significantly higher levels than netback prices from traders selling contracted supply into delivered markets. Although there are not a lot of downstream buyers seeking fob-basis cargoes, traders are needing to cover short positions, while there are "not a lot of refinery tonnes out there", a fourth trader said. "We are not able to find any spot cargo from refineries," the first trader said, which is supporting prices "even though demand is not great." But the tighter availability from refiners is not causing prices to rise, as there is still a lot of contracted volume in traders' hands, and demand has been relatively weak. Traders still have a lot of volume to move in July and August, a fifth trader said. Another factor is higher supply from refiners outside the US Gulf: Spanish refiner Repsol has begun producing high-sulphur coke at one of its refineries , and there is also new high-sulphur supply from Mexico . Weak demand for high-sulphur coke from buyers in India, China and Turkey, where coal has been competitive, still pushed the fob US Gulf 6.5pc sulphur coke price down by 50¢/t last week. The spread between mid- and high-sulphur has also been narrowing because of the tightness in high-sulphur combined with greater mid-sulphur availability. The 4.5pc sulphur US Gulf price's premium to 6.5pc sulphur has held at $4.50-$5/t over the past three assessment weeks, down from $11/t on the week of 15 April and the lowest since early February. By Lauren Masterson and Hadley Medlock Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Turkey's cement output, sales may rise in 1H

25/05/19

Turkey's cement output, sales may rise in 1H

London, 19 May (Argus) — Turkey's cement production may increase slightly in the first half of this year because of improving exports to key destinations and growing seaborne markets for the material. Some market participants expect cement firms in Turkey to produce about 41-43mn t of cement in the first half of this year to support an increase in exports and the potential for some buyers to return to the country's cement market. In contrast, the country produced 40.6mn t in January-June 2024, the latest data from the Turkish Cement Manufacturers' Association (TCMA) show. Low prices for fuels like petroleum coke and coal are likely to contribute to firm cement output and a rebound in exports after a sharp reduction a year before. The Turkish lira has also continued to weaken against the US dollar since March , which may help offset a decrease in export prices, making exports more profitable for cement makers. While Turkey's cement exports declined slightly to 3.74mn t in the first quarter from 3.96mn t the same quarter in 2024, sales to markets such as Italy, Syria, Albania, Guyana, Haiti and the UK were on the rise, according to data from Global Trade Tracker (GTT). And it is possible that Ukraine could become a potential destination for Turkey's cement exports, as demand from the country's construction sector may grow sharply on the beginning of talks of an end to Russia's invasion . Some stabalisation of the conflict in Gaza may also boost trades to the region and could lead to the cancellation of the country's Israel trade ban from April 2024, many market participants said. Turkey's total cement exports fell by 15pc on the year in 2024 to 13mn t following the country's ban on cement sales to Israel, one of its largest consuming markets. The country's cement sales to Israel fell to 926,000t in 2024, down from 3.48mn t in 2023, according to GTT. But limited cement sales to Israel may still happen this year through longer supply chains involving third-party countries, according to some market participants. Clinker exports also increased to 1.8mn t in the first quarter, up from 1.4mn t a year before, because of high demand from Europe and Africa. But high interest rates at 46pc and expected inflation rates at 36pc in May could still limit the uptick in Turkey's cement production and sales, as they continue to pressure domestic demand for cement. Uncertainty surrounding government and private spending on construction and infrastructure projects could also contribute to lower domestic cement demand. Cement production rose by about 6pc on the year in 2024 to 84.8mn t, while clinker production picked up by 6pc to 77.53mn t, according to TCMA. Total domestic sales for these materials grew by 9pc year on year in 2024 to 71mn t because of rebuilding in the southern regions after two major earthquakes struck Turkey in February 2023. By Alexander Makhlay Turkey's cement domestic and export sales mn t Turkey's cement and clinker exports mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US producer Core raises coal sales volume outlook

25/05/08

US producer Core raises coal sales volume outlook

Houston, 8 May (Argus) — US coal producer Core Natural Resources plans to sell more coal in 2025 than previously anticipated, with stronger domestic utility demand expected to offset challenging seaborne market conditions and some production setbacks. Core projected on Thursday that it will ship around 75.5mn-81mn st (68.5mn-73.5mn metric tonnes) of thermal and metallurgical coal this year, up from its February forecast of 72.5mn-79mn st. The new expectations for this year still are lower than the combined 85mn st sold in 2024 by Arch Resources and Consol Energy before the two companies merged in January to form Core. On the thermal side, Core has 75.6mn st of coal under contract to ship this year, including 26.5mn st of high calorific-value (CV) thermal coal, 41.9mn st of Powder River basin (PRB) coal and 7.2mn st of metallurgical coal. While the global trade environment is "uncertain", there are domestic opportunities because of continued US electricity load growth, chief executive Paul Lang said on Core's first-quarter earnings call. Overall US electricity generation was 3pc higher in 2024 than in 2023. And in the first four months of this year, generation was 3.9pc higher than in January-April 2024 as coal-fired generation climbed by around 20pc, more than offsetting a "small" decline in natural gas power, Lang said. Colder-than-normal weather during the first quarter resulted in surging natural gas prices and higher power prices in the PJM Interconnection, causing generators to dispatch more coal power than expected and trimming inventories. Utilities are in the market earlier this year than they had been recently, seeking both spot and term coal volumes, Core senior vice president Robert Braithwaite said. "We actually have a couple [requests for proposals] out today," Braithwaite said. One solicitation is for deliveries through 2030 and one is for deliveries through 2028, he said, without naming the prospective buyers. Core also expects a number of international headwinds to be short-lived. While there has been "a bit of a price wall" for potential high-sulfur thermal coal business to India because of recent drops in petroleum coke prices, "we would expect that to pick back up in the coming months", Braithwaite said. In addition, if there is a trade deal between China and the US, China may resume buying US thermal coal and petroleum coke, he said. This would tighten the supply of coal and petroleum coke going into the Indian market and support higher fuel prices, according to Braithwaite. And although seaborne metallurgical coal markets remained muted during the first quarter, growing blast furnace capacity in southeast Asia is anticipated to strengthen export demand for US coking coal, Lang said. Last quarter, the company sold 2.31mn st of metallurgical coal. Record quarterly production at Core's metallurgical coal-producing Leer mine in West Virginia limited the impact of a longwall outage at Leer South, which was sealed in January to extinguish a fire. Core said it resumed continuous miner operations at Leer South in February and expects to restart longwall production by the middle of this year. In addition, there were three longwall moves at the producer's Pennsylvania mining complex during the quarter. Lang noted that there is a fourth longwall move currently in progress at the complex, and the fifth and final planned move for 2025 will occur in the back half of the year. Core's total coal sales during the first quarter fell to 20.1mn st of thermal and metallurgical, down from 21.3mn shipped by Consol and Arch combined a year earlier. Core sold 7.1mn st of high CV thermal coal at an average price of $63.18/st last quarter, and 10.7mn st of PRB coal priced at an average of $14.93/st. In the first quarter of 2024, Consol's Pennsylvania mining complex sold 6.1mn st of high CV coal and Arch shipped 12.8mn st out of the PRB and from its high-CV West Elk mine in Colorado. By Anna Harmon Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Unimetal acquires Germany’s CS Additive

25/05/06

Unimetal acquires Germany’s CS Additive

Houston, 6 May (Argus) — Sao Paulo-based coke marketer and calciner Unimetal purchased German carbon products producer CS Additive at the end of April, a company that uses petroleum coke as a raw material for its product called Carbolux. CS Additive produces carburizing products for the iron and steel industries. Its Carbolux products are used for steel and casting production, brake linings and other specialty carbon products such as graphite lubricant. The company said it uses graphitized and calcined petroleum coke from European, South American and Chinese sources to produce these products. The acquisition will help to increase its market coverage in Europe, Turkey, the Middle East and India, Unimetal said, as well as "strengthen its commitment to environmentally friendly, energy-efficient processes and state-of-the-art thermal cleaning technology." "CS Additive's location in the industrial heart of Germany will play an important role to process and distribute our entire product portfolio," Unimetal chief executive Alan Yung said. By Hadley Medlock Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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