Category Archives: calcined coke
Do you remember the AZ China CPC Index? Well, we’ve recently updated it to include June shipments data and we hope this will be helpful for you and will provide better information regarding the global CPC market. It’s now been over 1 year since we officially started this index, so the value of the information is growing every month.
Based on the data we’ve collected, it appears that Chinese anode grade CPC FOB price is falling gradually. The weighted average price in June has been under US$320/t, down 9% compared to the same period last year.
On the other hand, the export volume shrank greatly in the first half of 2014. As a guide, if we were to simply double the data numbers of the first half year so far, we would see that the export volume in 2014 will not exceed 1 million.
We believe the fall of both volume and price is due to the closure of high cost smelting capacity outside China. Therefore, along with the rally of LME aluminium prices, smelters will almost certainly run at a higher rate, which indicates an improving CPC demand. In fact, the same thing has happened in China as well, so it’s fair to say that the Chinese CPC market in the 2nd half will be most likely be tight.
To get a better price, we would encourage you to have a reliable tool to price the products. We believe our AZ China CPC Index is an invaluable asset for you.
We periodically update the historical data for our subscribers to assess the general trend, but the real power of this tool is to provide you with in-time market data running on a live basis. It would be very helpful to assist in pricing the CPC fairly for both buyers and sellers, and could greatly offset the volatility risk.
Therefore we are hoping for your help to grow this index. Your generous addition of data would be highly appreciated and please do let your partners know about this index too. The more people that join in this program, the more precise the data will be. Besides helping us by sharing your data, your comments and suggestions are also highly welcome, so please do not hesitate to contact us if you have any question on using this index.
Please click here to enjoy our current index for free!
Dear readers, our latest “Weekly Report Review” has been published. if you have any questions, please tell us. Thanks!
Energy
Iraq tensions drove oil price up sharply last week. But domestic coal prices remain stable. Although coal consumption is increasing in summer, but potential negative factors continued to work, especially high level stock and decreasing ship transport fee.
AL
Compared with increasing spot alumina price, limited trade volumes of imported alumina continued to suppress prices, which still remain at a low level. However, aluminium prices continued to climb slightly.
Raw material of AL
After a adjustment in petcoke prices, last week both anode and fuel grade coke prices remained stable. But for anodes, because of long term weak demand and reducing exports, anode prices declined last week.
For other product, ALF3 rose further last week due to the low level inventory. The total aluminum fluoride stocks held by the 17 main plants decreased by compared with April.
For more information on subscribing to this report and getting the full picture, contact us at blackchina@az-china.com.
The search for anode grade petcoke from oil refineries in Saudi Arabia and other countries in the Middle East seems to be finally bringing some results. After countless calcining projects ran dry on the lack of anode grade coke, it seems that a new development is on the horizon.
The Abu Dhabi Ruwais refinery expansion will use local Murban crude oil, a light sweet sour crude. Reliable sources within the industry are telling us that the refinery will produce as much as 900,000t of anode grade petcoke per year.
It then only needs for someone to build a calciner at or near the refinery, and we understand that there are plans to do so. That will increase pressure on Chinese calcined coke producers, but will also put pressure on calciners in India and Brazil. The latter have been working to ship CPC into the Middle East for some time.
The Ruwais refinery is owned by the Abu Dhabi Oil Refining Company, better known as Takreer.
Previous projects such as the Gasan calciner were thwarted because the oil refineries in the region finally moved to producing fuel cokes, leaving such projects with unworkable economics.
Editor’s note: Correcting the description of Murban from sweet to sour. It is 0.79% Sulphur, and the break point for describing a crude as sweet is 0.5%. Thanks to “Hard Rock 48″ for pointing out the error.
No, those numbers are not some sort of Lotto game. These are the latest prices for Chinese calcined petroleum coke.
The desperation is rising amongst Chinese producers, and buyers are being merciless. The price of “standard” medium to high sulphur CPC has dropped dramatically, according to the buzz we are hearing in the Chinese marketplace. Where only 3 months ago, CPC with say 3% S was selling at $308, even that low price has now disappeared. As soon as the price broke through the $300 floor, the market was unable to find a new floor, despite the fact that green coke prices have not moved by as much.
One producer we know of offered $298 to one of his regular customers, but got gazumped by a competitor who offered $288. The producer retaliated by dropping his price to $258. Now a major consumer of CPC has taken the lead by calling for $246 for one of his plants and $248 for another. And has told his suppliers that his payment terms are 90 days, with no LC.
Another consumer has demanded an into store price that when trimmed back to CPC puts the coke at about the same price as green coke, without allowing for freight, or even the cost of calcining the coke.
Part of the problem in the Chinese market is that there are one or two “rogue” suppliers who will stop at nothing to keep orders flowing. By rogue, I mean that some of the tricks that they are up to would cause buyers to immediately shun them if the buyers knew what was going on. As a result, more reputable suppliers are being put under the hammer, and being forced to reconsider some of their standard practices, in a virtual race to the bottom.
The danger for buyers is that their short-term wins of low CPC prices may come at a cost of delivery defaults at best, out-of-spec coke at worst (what do you do if your silo is full of crap CPC?) and a long-term danger that suppliers will retaliate when the shoe shifts to the other foot. As it always does.
Still, you have to hand it to the Chinese when it comes to finding solutions to the problem. One supplier we know of is apparently rushing through an IPO, hoping that the cash injection will save his business. If the customers won’t pay, perhaps unwitting shareholders will.
For registered attendants of AZ China’s 4th International Aluminium and Carbon Conference, on the night of Tuesday, May 6, 2014 there is an option: to Gala, or not to Gala? That is the question.
But what is the measure of our decision?
If our minds long to be entertained, dulled by the weary excuses for conference entertainment we so often see – we say yes! Our pre-dinner traditional Chinese entertainers are as charismatic as they are alluring.
If our hearts yearn for delectable cuisine so scrumptious our watering mouths flood the lands – we say yes! Guests will dine at 7:30pm in picturesque Houhai, a reclusive lake smack dab in the middle of Beijing surrounded by enticing nightlife.
Diners will be served a scrumptious assortment of seasonal dishes, basted and broiled to perfection.
If our bodies long for an adventure we haven’t had since our misspent youth – we say, why certainly, yes! A convenient adventure that is; guests will be promptly and safely delivered to and from each stage of the Gala journey and still get back to the hotel early enough for a good night’s sleep before the final day of the conference. If you’re a night owl, you’ll also have the option to stay and kick back at the surrounding neon-lit guitar bars for a lakeside beer or wander around the lake at your own pace.
But don’t be fooled by the guise of just a great meal and environment! The evening has cunningly disguised networking opportunities for the benefit of guests’ business development as well as their enjoyment and relaxation.
How to get on board the Gala Dinner train?
On the registration page of the conference, there is an added option to attend the Gala dinner. For those who have already registered and did not check the option but would like to attend, you may pay for the Gala dinner at a later point, although we can’t guarantee available seats. There are already a very limited number of remaining spaces available. Register soon for a great night in the heart of Beijing!
Unlike this divisive Gala occasion, AZ China’s Gala Dinner won’t be half as awkward!
Rain CII CEO Gerald Sweeney knows a thing or two about the calcined coke market.
Since the merger of Rain and CII about 7 years ago, Gerry has been steering the Rain CII ship through the highs and lows of the market, with great success. This week I was able to catch up with Gerry via phone, and asked him to share with us some of his wisdom. (The answers I show in these questions are from my notes, and are not direct quotes.)
What was 2013 like for Rain CII?
Last year was a down year for Rain CII, with lower volumes and lower margins compared to 2012. However, this was not unexpected, with the global aluminium price being so low and with smelter closures around the world. Operationally, the company performed well, and was operating at the mid to upper 80% utilisation rate. There were some birthing pains at the Lake Charles Co-Gen project, but again, this was not unexpected.
The major challenges facing the company in the coming year or two?
We can’t control the aluminium price, so all we can do is manage our own business really well. We will keep pushing on product specifications, keep cooperating with aluminium plants that allow us to use more marginal cokes. We have a great opportunity with our new asset in Rutgers, as they have a full lab facility for testing anodes using various grades of coke. Meantime, our shot coke technology is doing well, and we have more developments to come.
On the subject of Rutgers, many people ask if it will one day lead to Rain CII becoming an anode producer?
There is no way we would launch into an anode production facility unless it was with a smelter partner. I find it interesting how little the industry knows about what is still achievable with cokes that are available today. There is still a lot of low-sulphur, low-metals coke that is not going into calcining, but those cokes need a price environment that allows the industry to secure the coke on a sustained basis. Alternatively, there are cokes which some people refer to as non-traditional cokes, but first the industry needs to understand that these cokes can be used successfully. Over the longer term, properties have shifted out, but we need to keep making the case that there is still some room to move.
When it comes down to the bottom line, the industry has two choices - either the CPC price rises to allow calciners more flexibility to use low sulphur, low metal cokes, or the industry unlocks the coke specifications.
What’s your take on the Chinese calcining industry? We have seen some new capacity enter the market, but other projects have died on the vine.
Most of the new plants that have entered the China market are small scale plants serving the local market. So far, there has only been a small number of larger Chinese players in the international arena. But they will always face some fundamental problems. Shaft coke cannot be used on its own. It must be blended. But for as long as their green coke suppliers manage the calciners’ margins, they will be in a squeeze. The big refiners in China see the CPC price and want bigger and bigger slices. China will always be an important factor in meeting future demand, but its own aluminium industry could end up being the biggest determinant.
China’s anode exports rose by more than 20% last year. Do you see any threat that the world’s aluminium smelters could switch to an anode purchasing strategy?
That was an idea that was floating around a few years ago, when smelters were looking at ways of reducing costs. But I don’t think it has any attraction to them right now. If there was any interest, we would be seeing a long development time, but the logistics and strategic limitations of the idea make it unlikely.
Rain is listed in the Indian stock market. Is there any likelihood that we will see listings on other bourses?
It might happen in the distant future, but right now with the equities markets so down, there is no point. Certainly the Rutgers purchase gives us a diversification that makes us more attractive. Although CTP represents 50% of the output, from a revenue point of view the split is more like 30%/70% to Chemicals, so Rutgers gives us diversity in our revenue streams as well as products.
What’s your outlook for the coming year or two?
As the aluminium industry goes, so we go. It’s unlikely the metal price will rise by all that much, so the environment in which we operate will largely be unchanged. We will keep on with pushing the specs argument, managing costs and meeting our customers’ needs.
What’s the status on your project to build a calciner in India?
A decision to proceed will be made during the second quarter 2014.
Will we see you at TMS this year?
No. Unfortunately I can’t make it this year, but Rain CII will have a team there. We will have a team at the AZ China conference as well, so we are looking forward to that.
Many thanks to Gerry for giving me the time to interview him.
2013 is coming to an end and we will soon welcome 2014. We’d like to thank all of our clients for your support and wish all of you and your family a happy New Year!
More than half a year has passed since we officially launched the AZ China Calcined Petroleum Coke (CPC) Index and we are excited to see many of you are interested in contributing. CPC plays an important role in making primary aluminium, which roughly accounts for 10% of the total cash cost of production. However, different from other essential raw materials like alumina, there is no clear pricing methodology for CPC such as linking to the LME aluminium price. And within a depressed aluminium market environment, the room for adjusting power and alumina costs (the two major costs in making aluminium) as well as other raw materials such as CPC is limited. Real time market intelligence is critical for both CPC producers and consumers to negotiate fair deals.
The AZ China CPC Index (CPCX) is made up of actual transaction data. The Index requires both the seller and the buyer to add their transaction data into the index system and index program will then automatically confirm that both sets of data match. Our intention is to ensure the data is accurate yet still confidential.
The CPCX tracked two countries in 2013 and we hope to add more in 2014. One of the countries, India, saw the average monthly price remain relatively flat throughout the year with some downward pressure due to lack of demand from aluminium. The other country, China, saw the benchmarking price in Shandong and Jiangsu fluctuate drastically. Prices slumped substantially in February and gradually reached a bottom of US$334/t in June. Then prices rebounded and hit the year high US$415/t in August but soon adjusted downward and closed at US$342/t in October. We will notice our CPCX subscribers of future trends and developments in CPC in 2014.
If you are not yet a CPCX subscriber, but are interested in the CPC global market, it takes just 3 minutes to apply for a trial account. Click here to register and please contact richard.lu@az-china.com for questions.
We’re just two weeks away from the online petcoke event of the year. Register today to ensure your payment of just $99 will be received in time. Here’s the link: https://petcokeconference.az-china.com/register.html
It’s going to be a great time of discussion and info sharing!
Congratulations to the folks at Sinoway Carbon on the official opening of Phase 1 and launch of phase 2.
At a ceremony held a few days ago, about 100 guests watched as the ribbon was cut.
Phase 1 represents 280,000t capacity, and phase 2 will double that when it is finished in about 12 months time.
Dubal owns 20% of the operating company! and has already taken delivery of the first cargo of CPC.
President of Sinoway International, Liu Tao, addressing the audience.
New general manager of the calciner, Dylan Wang, with Marketing Manager Tony Botelho.
The topics and panelists
Shale oil/tight oil
In the last 4 years, the USA has dramatically increased its output of domestic crude oil, thanks to the development of new technology to extract oil from geological rock formations such as shale rock.
Tight oil, of which Shale oil is one type, is now reaching 1 million barrels per day, and is forecast to double output. American oil refineries, especially those that produce anode grade petcoke, are now trying to figure out what to do about the rising influence of tight oil. Tight oil can deliver huge savings to a refinery, but the impact on each refinery’s petcoke production can be highly variable. Refineries that switch to Canadian Heavy oil will produce substantially more fuel coke, but those who switch to Eagle Ford or Bakken will produce a lot less coke. Some estimates predict that anode grade coke production call fall by more than half.
What is the full story on the shale oil phenomenon? What is the impact on green coke production, now and in the foreseeable future? How are calciners reacting now, and what additional challenges are ahead of them?
To examine these questions, we will be joined by:
Stuart Ehrenreich, Managing Director, Cascade Resources
Keith Neyrey, Customer Support Manager, Rain CII
China Petcoke
In this session we will examine the new/old phenomenon of hydro treating the vacuum materials in Chinese oil refineries, and what this will do to the supply of green coke.
Sinopec have reportedly started experimenting with the use of hydro treating in a couple of its refineries. Although the technology is not new, its application in today’s environment represents a threat to coke output. Some have reported that Sinopec’s experiments have led to a petcoke output reduction of up to 30%.
We will learn what the other major petcoke producers are doing to improve their value products output, recognizing that increased light product output means decreased coke output. What is CNPC doing?
On a broader scale, we will look at China’s total petcoke supply picture. 2012 saw no growth in petcoke supply – what is the outlook for 2013, and 2014?
What is happening with imports and exports, and what about the talk of new Customs Tariffs on petcoke?
With the changes to the total supply side in China, what does this mean for availability for export? To what extent is China dipping into medium-high sulphur cokes to support its anode demand?
To examine these questions, we will be joined by:
Ji Yuan, Analyst at AZ China, and author of the monthly Black China Report
Wang Hao, Senior Engineer and Vice Director, Petrochina (TBC)
Calcined Coke
Anyone involved in the global calcined coke/anode business will be aware that calcining capacity has grown strongly in recent years. New projects in China have recently opened, while others in China, India, and the Middle East are in various stages of development.
This growth comes at a time when primary aluminium production is under pressure from low prices and lack of profitability. Outside China, the outlook is grim, with closures likely to exceed expansions for the next couple of years.
Meantime, inside China, new anode plants and new smelters are adding to the total demand, but from within China. What will that do to availability for the rest of the world? Will China’s domestic demand for anode grade coke, combined with lack of growth of this coke, cause shortages of coke? What does that do to the calciners that have recently been built or are due to enter the market?
Out of all this, where are prices heading? If petcoke prices rise, won’t that put a squeeze on calciners, especially as smelters are less willing than ever to pay more.
Finally, what does the panel think will happen with anode plant development? Is there any threat to the traditional model that sees each smelter having its own anode plant? What about tightening environmental regulations, and the decreasing availability of capital for furnace rebuilds? Will we soon see the day when global anode producers, perhaps based in China or elsewhere, are supplying multiple plants with their anodes from one massive ultra-modern anode plant?
To help us understand these questions, we will be joined by:
Mr Tony Botelho, Sales Manager, Sinoway Carbon, China
Dr Akram Madanat, formerly of Gasan Calcining Project, Saudi Arabia
Open Forum
In the first 3 topic areas, we have tried to address the major issues facing the petcoke industry right now. But that doesn’t mean there are no other topics to be examined. Some of these include:
- Fuel grade coke prices – will coal price drive fuel coke prices down?
- What of the talk that high sulphur coke imports will be taxed in China?
- What is happening in India? Will that country grow CPC exports?
- What is the price gap between CPC at 3% sulphur compared to lower levels of sulphur?
- How to obtain the best prices for CPC, and what about the new CPC Index services popping up?
To help us with this discussion, our panelists from the previous 3 sessions will be joined by Paul Adkins, Managing Director of AZ China and Oscar Mascarenhas of Goa Petcoke Consulting.
To register for this conference, go to the forum website and use the online registration page at https://petcokeconference.az-china.com/ (The registration page will be open on or before October 23.)
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