Petcoke market, wrap-up on Russia and CIS – 2021
Factors and drivers of interdependent markets
2021 was a record-breaking year in every respect. After the pandemic of 2020, all markets found themselves in a commodity supercycle situation, largely due to pent-up demand as well as broken supply chains.
ENERGY prices rose almost throughout the whole year. Coal was no exception and rose due to strong demand and unstable supply. Steam coal prices peaked in October, increasing almost threefold compared to January.
Source – https://fred.stlouisfed.org/series/PCOALAUUSDM
High-sulfur petcoke rose along with coal prices, also peaking in October, and cooling off a bit towards the end of the year.
Steam coal and petcoke FOB prices – historical view 2005-21, Source – CementNews
The metal markets also experienced a serious rebound. ALUMINUM rose nearly 50% in October from the beginning of the year. High electricity prices towards the end of the year forced some producers to announce a smelters shutdown, which, together with low stock rates, will support aluminum prices in the near term.
Source – Reuters
FREIGHT rates broke records this year. Among other things, the Baltic Dry Index calculated by the Baltic Exchange reached 5,650 points at the beginning of October 2021. By the end of the year, the level dropped by more than 2 times, to 2,200 points, which is still higher than what it was at the end of 2020: 1,400 points.
Key events and results of the coke market in 2021
Despite the high prices for petroleum coke of all quality types, its production has not increased in all regions. For example, the output of comparable quality ultra-low-sulphur petroleum coke produced at the Baku refinery increased by more than 30% compared to the previous year, while the Turkmenbashi refinery, according to our estimates, fell by 20%. The reason for the drop in coke production in Turkmenistan is the low utilization rate of the DCU and technical problems.
In 2021 the following DCUs were launched:
- The second phase of TANECO – DCU with the capacity of 650 thousand tons of coke.
- DCU at NAFTAN. In 2021 the DCU was launched in test mode. Full commissioning of the unit is scheduled for the beginning of 2022. The capacity of the unit is 450 thousand tons of coke.
The Russian logistics industry experienced significant infrastructure problems in 2021, such as a shortage of rolling stock and a record growth of open top RW wagon lease rates. The RailEx open top RW wagons rental index increased by 3.5 times during the year.
Another issue was border crossing closures, and an increase in abandoned trains in Russia, Kazakhstan and Mongolia.
The main border crossing between Kazakhstan and China, Dostyk/Alashakou, has been out of operation since the summer. This border crossing provided up to 150,000 tons of petroleum coke for the needs of smelters in the Xinjiang region. By the end of the year, the situation at this border crossing had not returned to normal.
In December, the Chinese side announced the closure of the Erlian/Zamyn-Uud (Monolia/China border) and Zabaykalsk/Manzhouli and Grodekovo/Suifenhe (Russia/China border) border crossings. By the end of the year, only Grodekovo/Suifenhe had re-opened.
Forecasts for 2022
The Omsk Refinery is launching the new DCU with a capacity of 700,000 tons of petroleum coke.
Railroad transportation is expected to experience some difficulties. It is likely that the acuteness of the open top RW wagon shortage problem will subside by the end of the first quarter, but the Railroad Administration has already announced an increase in tariffs for next year. In particular, indexation of tariffs for cargo transportation by Russian Railways in 2022 will amount to 6.8%, while the expected inflation in Russia in 2021 will amount to 8.39%, according to Rosstat.
DYM Resources’ results
2021 was an active year for the DYM Resources petcoke market:
- We were actively shipping all types of coke, including container shipments.
- Last year we shipped petroleum coke from almost all refineries producing petroleum coke and located in CIS countries.
- We shipped both green petroleum coke (GPC) and calcined petroleum coke (CPC)
- Coke shipments went to all Chinese railroad border crossings working with open top RW wagons.
DYM Resources specializes on petroleum coke trading, working with low, medium, and high sulphur petcokes. We can deliver the product by rail, dry bulk vessels, trucks and in containers.
For petcoke enquiries please contact us via firstname.lastname@example.org