Venezuelan coke exports surge on port infrastructure
A large number of Venezuelan petroleum coke cargoes have become available in the seaborne market over the last couple of months after a solids handling system at the Jose port started up earlier this year, according to market participants.
The record-high prices for coke in the seaborne market have likely played a role in spurring the cash-strapped country to complete the infrastructure improvements. Seaborne coke prices at or above $200/t go a long way toward paying for terminal repairs or whatever else is needed to get operations running smoothly, one cement maker said last month.
Venezuela's state-owned PdV said in June 2017 that it was installing a "rail-veyor" system that would transport coke from large stockpiles to the port berth, bypassing an unreliable conveyor belt system and costly and time-consuming trucking. Coke moves from the stockpiles into cars on a light rail track, which then transfers it 2.5 miles (4 km) to be loaded onto barges and then into oceangoing vessels. This system also avoids draft restrictions and damaged shiploaders at PdV's original two coke-loading berths.
The company estimated at the time that the system would allow it to increase coke exports to about 200,000t/month, working down its tens of millions of tonnes of stockpiled coke within five years.
Now, five years later, the system is finally operational, sources say. And monthly exports in April, May and June could be approaching the predicted 200,000t/month rate.
The country's export plans were hamstrung by US sanctions on PdV implemented in 2019, which caused many international buyers to avoid purchasing its coke. Some cargoes have made their way to buyers in countries like China, Turkey and Tunisia in recent years, but exports have remained sporadic until recently.
Turkey imported 58,100t of 4.5pc sulphur Venezuelan coke in the first quarter, up from the 57,900t it imported in all of 2021 and compared with none in 2020, according to customs data compiled by GTT. China imported 137,700t in April alone, nearly as much as the 176,100t it received in July 2021-March 2022 combined. There had been no Venezuelan coke reported prior to that period.
Now, the "market is full of Venezuelan coke," one Chinese coke trader said.
But payment terms are more complex because of the international banking system's general unwillingness to deal with Venezuela. A cargo of Venezuelan petroleum coke waited on India's west coast for over three weeks early this year seeking to discharge, with buyers ultimately unable to meet payment terms despite the cargo's more than $60/t discount to prevailing 6.5pc sulphur prices. When a second cargo was recently sold to India, the Germany-based trader agreed to receive the entire payment basis discharge port, helping to minimise risk for the buyer.
Venezuela discount entices Indian buyers
While China was a top destination for Venezuelan coke in April and May, it is now increasingly being offered to India as buyers scout for cheaper alternatives to cushion the impact of record-high fuel prices.
A 28,000t cargo of Venezuelan coke arrived on India's west coast early this month, which may be only the second cargo to be purchased by Indian buyers in the last several years. Only one other 49,400t cargo arrived for an Indian cement market in October 2020, according to GAC Shipping data going back to 2015.
The May-arrival coke was booked towards the end of March at a price of about $220/t cfr India. This was as offers of April-loading Supramax cargoes of US 6.5pc sulphur coke were at an all-time high of $270/t cfr. Another cement maker on the east coast of India was heard to have recently booked at least one June-loading Venezuelan coke cargo between the mid $210s and $220s/t cfr. And at least one other cargo remains on offer to the Indian market.
Another change that could be related to PdV's new infrastructure is that buyers are receiving offers for larger cargoes. Venezuelan coke offers were until recently typically for smaller Handysize cargoes, carrying approximately 28,000t. A smaller coke cargo, at a discounted price to the two main high-sulphur origins — US and Saudi Arabia — suits small and mid-size buyers who prefer to reduce exposure in a highly volatile market. But offers of Supramax cargoes can potentially expand interest and encourage bigger cement makers to consider purchases.
At the same time, the delta between the Venezuelan and US coke offers has narrowed since the first trade this year.
Current prompt offers for Venezuelan coke are $220-$225/t cfr on the west coast of India for Supramax cargoes against offers in the mid-to-high $250/t range for the US material. This may suggest Indian buyers are becoming more comfortable with taking Venezuelan supply.
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Venezuela coke exports remain high in March
Venezuela coke exports remain high in March
London, 17 April (Argus) — Venezuelan petroleum coke exports look to have remained high in March even as loadings slowed in anticipation of the US' decision today to reinstate sanctions on Venezuelan crude and oil products. Venezuela exported about 400,000t of coke in March, up by 59pc on the year and up by 5pc from February, according to preliminary data from global trade analytics platform Kpler. February's total initially appeared to be higher than 500,000t, but was revised lower in later weeks. The elevated exports reported for March were likely a result of significant delays in loadings, with many of the cargoes purchased in January and February, before many companies began backing away from business with Venezuela. Venezuela coke cargo loadings appeared to be slowing last month ahead of the US' possible reinstatement of sanctions. The US administration today reimposed sanctions targeting Venezuela's oil exports and energy sector investments — including petroleum coke — and set a deadline of 31 May for most foreign companies to wind down business with state-owned PdV. The US decision rescinds a sanctions waiver issued last October that was due to expire on 18 April and was tied to Caracas' agreement to hold a competitive presidential election and to allow opposition politicians to contest it. As of 17 April, a total of 451,000t of Venezuelan coke was in transit, including 146,100t with no listed destination, although some of this tonnage may have a final buyer that is obscured because the cargo has traded through a long chain of third parties. The coke volume without a listed destination is about one-third of the 461,700t without a clear destination in late February , meaning most of that floating coke was ultimately sold. Some distressed Venezuelan mid-sulphur coke cargoes were recently heard being offered to buyers in Asia at about $100/t cfr, a significant discount to US high-sulphur coke, which was last assessed at $113.50/t cfr India and $120/t cfr China. India remained one of the largest destinations for Venezuelan coke in March, although shipments slipped from a month earlier. Venezuelan coke exports to India were at 116,400t in March against 124,300t in February and 80,200t a year earlier. While some larger Indian cement companies will pull back from Venezuelan business because of the renewed sanctions, some smaller buyers were purchasing from the country prior to the six-month sanctions waiver last October and are likely to continue. But China, which had been the largest destination for Venezuelan coke since upgrades in 2022 to the Jose port allowed for much higher exports, has taken little recently. Venezuela shipped 50,700t of coke to China in March, down from 120,300t a year earlier. But this was up from none in February. Turkey was the second-largest destination for Venezuelan exports in March at 76,200t, down from 148,300t in the prior month but up from none a year earlier. Cement plants in Turkey boosted purchases of Venezuelan coke at the end of 2023, but most stopped making new trades since February because of the risk of renewed sanctions. Venezuela in March also exported 45,500t of coke to Trinidad and Tobago and and 33,700t to Jordan. Exports may drop in April following the lower demand in February and March. From 1-17 April, Venezuela exported 146,200t of coke, according to Kpler. In addition, about 85,500t was loading at the Jose port and 281,800t was scheduled for loading later this month. By Alexander Makhlay Top Venezuelan coke destinations '000t Venezuelan coke exports '000t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Motiva moves coke to Deepwater
Motiva moves coke to Deepwater
Houston, 10 April (Argus) — US refiner Motiva has begun moving petroleum coke supply from its damaged Pabtex terminal in Port Arthur, Texas, to Houston's Deepwater terminal for loading, according to a number of market participants. The refiner has been unable to load its production from the Pabtex terminal since mid-March, when a vessel collided with and damaged a shiploader there . But Motiva has finalised an agreement allowing it to rail its trapped coke to Houston's Deepwater terminal. Motiva on Tuesday began railing 10,000t/day to Deepwater, market participants said. Pabtex serves Motiva's 626,000 b/d refinery in Port Arthur, Texas, which has the capacity to produce about 3mn t/yr of petroleum coke, mainly high-sulphur fuel grade. It is unclear how long the refiner will be railing its volumes into Deepwater. But the damage at the Pabtex shiploader seems unlikely to be resolved soon. Cargoes of coal and other commodities that were blocked by a bridge collapse in Baltimore, Maryland, on 26 March have also begun moving to other terminals. Eastern railroad Norfolk Southern said on 3 April that it had "successfully transported" the first cargo from a Baltimore vessel diverted to its Lamberts Point terminal in Norfolk, Virginia. By Delaney Ramirez Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Panama Canal to restrict May transits on work
Panama Canal to restrict May transits on work
New York, 9 April (Argus) — Maintenance at the Panama Canal for the Panamax locks, responsible for around 70pc of all ship crossings at the waterway, will cut the daily number of vessel transits through these locks for nine days in mid-May, the Panama Canal Authority (ACP) said today. The ACP said it will reduce Panamax lock transits from 7 May to 14 May by three to a total of 17. The cuts entail two fewer "super" category slots for vessels like medium range (MR) tankers and Supramax bulkers and one fewer "regular" category slot for smaller vessels. An additional day of downtime "allowing 24 hours for unforeseeable maintenance delays" will put the projected end-date for maintenance and the return to 20 total Panamax lock transits on 16 May, according to the ACP, constituting a nine-day reduced-transit period that should drop total transits in the period by around 27 vessels. The potential for heightened competition amid a backlog of vessels vying to transit during this time could be mitigated by assigning "additional transits per day for each vessel category" based on the canal's "daily water consumption quota", according to the ACP. "These additional slots may be assigned to booked vessels that have already arrived at canal waters," the ACP said. "This measure is a temporary service subject to operational assessment, open to all vessel types based on the arrival date." The maintenance will primarily target the west lane of the Gatun locks, where ships enter the Panama Canal from the Atlantic basin, while the ACP noted that the east lane of the Miraflores locks on the Pacific side will undergo a simultaneous maintenance period from 11-12 May. Panamax lock transit auction prices hit low The average cost for ship operators to win an auction to transit the Panama Canal via the Panamax locks hit its lowest level Monday since Argus began the assessment in January on lower demand, particularly for dry bulkers utilizing alternative routings, and an uptick in auction slots in early March . "Since the peak period last year, auction prices have leveled off. They are generally near normal levels today," said the ACP. The rate for a Panamax lock auction dropped by $14,173 to $94,314, the lowest average price to transit since 26 January and representing a drop of $450,936 from the high hit on 5 February on a jump in demand ahead of lunar new year holidays across Asia-Pacific. Of the smaller dry bulkers that can fit in the Panamax locks, only 34 Handysize, 38 Supramax, and 31 Ultramax bulkers transited the Panama Canal in March compared with the 92 Handysize, 66 Supramax, and 88 Ultramax bulkers that transited in March 2023, the lowest number of transits in March for these segments through 2017, according to Kpler data. Dry bulk Panama Canal transits down, tanker transits stabilizing The share of dry bulkers utilizing the Panamax locks at the Panama Canal was at 15.2pc of total transits in February, down from the 25.5pc share that dry bulkers held in September 2023, according to ACP data, before the ACP instituted daily vessel restrictions and the current prebooking/auction slot system supplanted the previous, first-come, first-serve waiting system in late October 2023. Meanwhile, 149 MR tankers transited in March, down from the 169 that transited in the same period the year prior but up from the 107 MRs that crossed the canal in February. MR transits have risen every year in March, according to Kpler, as west coast South America diesel demand jumps on the resurgence of refinery utilization in the US Gulf coast after the first quarter turnaround season draws to a close. Crude, product, and chemical tanker transits rose by 1.7 percentage points to 30.3pc, making up the plurality of all Panamax lock transits collectively in February from September 2023, according to ACP data. The uptick in available Panamax lock auctions in early March has likely offset the steady demand for these vessels and contributed to the downward pressure on auction prices, while the reduced transits during the upcoming nine days of maintenance could reverse this trend in the short term. ACP expects transit restrictions to lift by 2025 In the long term, the Panama Canal expects a return to normalcy within the next two years, beginning with the start of the rainy season in the coming weeks. "Current forecasts indicate that steady rainfall will arrive in late April and continue for a few months," the ACP said today. "If this remains the case, the canal plans to gradually ease transit restrictions, allowing conditions to fully normalize by 2025." By Ross Griffith Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cement capacity at India's Ultratech crosses 150mn t/yr
Cement capacity at India's Ultratech crosses 150mn t/yr
Singapore, 8 April (Argus) — India's biggest cement maker Ultratech has crossed 150mn t/yr in capacity because of recent expansions and is on track to reach nearly 200mn t/yr over the next three years. Higher cement output typically raises consumption of petroleum coke and coal. Bombay Stock Exchange-listed Ultratech's capacity reached 151.6mn t/yr early this month with the commissioning of two greenfield cement plants of 2.7mn t/yr each. These units are in the southern state of Tamil Nadu and central state of Chhattisgarh. The latest expansions have raised its domestic capacity to 146.2mn t/yr. The firm also operates 5.4mn t/yr of capacity of in the UAE. Debottlenecking at four units in India last month led to a combined capacity addition of 2.4mn t/yr. Ultratech has added 50mn t/yr of capacity in less than five years with an investment of 320bn rupees ($3.84bn), it said, although it took the company 36 years to reach a capacity of 100mn t/yr. The firm has expanded its capacity by 18.7mn t/yr over the last 12 months. It is also executing expansion projects to add another 35.5mn t/yr across 16 locations and is in the process of acquiring 10.75mn t/yr of capacity from Indian private-sector firm Kesoram Cement. Ultratech will invest Rs324bn over the next three years as it sees a "significant headroom for long-term growth", it said. India is the world's second-largest cement producer after China but has a low per capita consumption of 240-250 kg/yr compared with a global average of 500-550 kg/yr, according to industry estimates. Most Indian cement producers are investing in expansion projects to address rising demand. Ultratech sold 27.32mn t of cement over October-December 2023, up by 6pc from a year earlier but slowing from double-digit growth in the four previous consecutive quarters. The firm posted year-on-year sales growth of 16pc in July-September 2023, 19.6pc in April-June, 14pc in January-March and 12pc in October-December 2022. Ultratech used 44pc of coke in its kiln fuel mix during October-December, up from 39pc in the previous quarter, partly replacing thermal coal as coke remained competitive. Imported thermal coal accounted for 46pc of the company's fuel mix in the latest quarter, down from 51pc in July-September. Domestic coal and alternative fuels accounted for the remainder. Ultratech used 43pc coke in its fuel mix during October-December 2022. The company's blended coke and coal fuel costs for October-December eased to $150/t, down by 25pc from a year earlier and by about 7pc on the quarter. The blended fuel cost was at a historic high of $200/t during July-September and October-December 2022, after coke and coal prices hit record highs in early 2022 following the start of the Russia-Ukraine war. By Ajay Modi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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