Indian petroleum coke consumption rises in June

India's petroleum coke consumption increased by more than 7pc from a year earlier in June, supported by a recovery in cement output after a nationwide lockdown to contain the Covid-19 outbreak was gradually eased from late April.

Consumption in June, the third month of the country's 2020-21 fiscal year, increased to 1.59mn t from 1.48mn t a year earlier and 1.52mn t in May, according to oil ministry data.

The June increase follows two consecutive months of steep declines in coke consumption. Total consumption fell in May by more than 28pc from a year earlier, following an even bigger 49pc year-on-year drop in April. India's coke consumption in April-June was 4.2mn t, down by 28pc from 5.87mn t in the year earlier period.

Indian cement plants were forced to suspend operations for a month from the last week of March because of the nationwide lockdown. Cement companies began to resume production in the final week of April amid tighter safety guidelines.

The gradual easing of the lockdown has supported cement demand and helped plants to increase their operating capacity. Indian cement output contracted by 22pc in May from a year earlier, to 22.2mn t. But output in May was up sharply from April, when the industry produced 4mn t of cement.

June's cement output data will only be released later this month but market participants expect a further recovery compared with May, which is underscored by the increase in coke consumption during the month. The Indian cement-making industry, the second biggest in the world, accounts for 71pc of the country's total coke consumption.

India produced around 334mn t of cement in 2019-20, marginally lower than an all-time high of 337mn t in 2018-19. Output could post a double-digit decline in 2020-21, market participants said, which could weigh on demand for seaborne coke.

ACC, the Indian arm of Switzerland-based cement producer LafargeHolcim, expects cement demand to contract sharply this calendar year, even as it is optimistic about a gradual recovery in the second half of 2020. India's gross domestic product is expected to contract in 2020-21 after rising by 4.2pc in 2019-20, hitting cement demand.

An uptick in consumption along with firm seaborne coke prices has prompted domestic producers to increase their July sales prices. India's largest private-sector petroleum coke producers RIL and Nayara Energy raised their basic sales prices for July by more than 18pc compared with June. Indian state-controlled refiner IOC has also increased its basic sales price for petroleum coke by up to 13pc from June.

By Ajay Modi