Petroleum Coke: Global Industry Markets and Outlook, 2015 (7th Edition)

LONDON, June 22, 2015 /PRNewswire/ --

The dynamics of petroleum coke supply are changing according to a new report from Roskill. New coking capacity and the heavier grades of crude oil being processed are increasing petroleum coke production. Consumption is still largely linked to competitive pricing levels, particularly in fuel markets where it competes with low value steam coal and shale gas.

Twenty new coking plants are expected on line worldwide between 2015 and 2020. The USA is still by far the largest producer, but US dominance of world production has continued to fall. Since the global economic recession, China has emerged as a new centre for petroleum coke production, with output of 26Mt in 2014, up 6% over the previous year. However, capacity expansions by both these major producers might not address the impending shortages of anode grade petroleum coke that are quantified in this latest Roskill report.

Asian buyers, in particular, have taken advantage of plentiful supplies, record lows in ocean freight rates and low petroleum coke prices to use petroleum coke as a cheaper source of fuel than coal. Buyers for power generation, cement and industrial uses in India and other Asian countries buy US and Venezuelan petroleum coke, bidding whenever prices for delivery to Asia are competitive. The first half of 2015 and the whole of 2014 realised record exports of uncalcined fuel grade petroleum coke from the USA, which was bolstered by overproduction in North America. Since the world economic recession, petroleum coke trade flows have switched oceans. Before the recession nearly all the petroleum coke shipped from the US Gulf and Venezuela was shipped to buyers in the Atlantic Basin, mainly to cement companies.

Petroleum coke consumption is expected to continue to rise in line with production levels as oil refiners are committed to make sure their by-product finds a market. Petroleum coke is one of several low value solid by-products of the oil refining industry and this is reflected in its pricing. Decisions about production levels are not made based on the markets for petroleum coke, as it is a waste product it is "priced to move" rather than to be left in expensive storage.

The total petroleum coke market is relatively small at 127Mtpy and worth some US$7Bn. It is caught between the contradictory demands of five other giant industries - oil refining, electricity generation, cement, steel and aluminium.

Oil refineries aim to produce higher sulphur petroleum coke, which then enables them to use the coking process to dispose of problem waste refinery streams. Crude steel and aluminium industries require higher purity, low sulphur, low metal petroleum cokes for the production of high quality electrodes. Fuel grade sponge and shot petroleum coke is used as an energy source in cement plants and electricity generation, and provides a useful alternative to coal for these energy users. This is as long as the delivered price on a per BTU (British thermal unit) basis is lower than coal.

Fuel grade high sulphur petroleum coke is the largest market, accounting for almost 90Mtpy. Between 2015 and 2020, Roskill forecasts that this market will grow by 3%py. Higher growth rates will be seen for anode grade coke used in aluminium and other smelters. Overall, Roskill forecasts that the petroleum coke market will increase by 3%py until 2020, slightly lower than the 4%py growth rate seen between 2009 and 2014.

Petroleum coke: Globalindustry markets and outlook, 7th Edition, 2015 has just been published, and is now available from Roskill Information Services Ltd, 54 Russell Road, London SW19 1QL ENGLAND. Tel: [phone]. Fax [phone] Email: [e-mail] Web: http://www.roskill.com/petroleum-coke

Note to editors

The report contains 292 pages, 163 tables and 80 figures. It provides a detailed review of the industry, with subsections on the activities of the leading producing companies. It also analyses consumption, trade and prices.

For further information on this report, please contact Kerry Satterthwaite, [e-mail] or call [phone].