Your SlideShare is downloading. ×
Beroe Present at Argus Asian Petcoke Conference Singapore
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Introducing the official SlideShare app

Stunning, full-screen experience for iPhone and Android

Text the download link to your phone

Standard text messaging rates apply

Beroe Present at Argus Asian Petcoke Conference Singapore

566
views

Published on

Pradeep Jaychandran, Senior Research Analyst at Beroe Inc. spoke at the annual Argus Asian Petcoke Conference 2013 ,in Singapore. In his session on Asia Rising? – Influence of Asian Metals & Materials …

Pradeep Jaychandran, Senior Research Analyst at Beroe Inc. spoke at the annual Argus Asian Petcoke Conference 2013 ,in Singapore. In his session on Asia Rising? – Influence of Asian Metals & Materials Demand on Pet Coke Dynamics, he talked about the strategic shift in center of gravity of global PetCoke industry from North America to Asia. He explored the trends in PetCoke demand, especially from Cement, Aluminum and Steel industries in Asia and the threat by coal as a viable fuel alternative to PetCoke. The conference was attended by industry luminaries such as Dr. AS Firoz, Chief Economist with Ministry of Steel, Government of India; David Love, Director of fuel-grade PetCoke, North America, Sinoway International Holdings, Stuart B Ehrenreich, Director, Cascade Resources & Consulting, among others.

Published in: Business, Technology

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
566
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
28
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Influence of Asian Metals & Materials Demand on Pet Coke Dynamics
  • 2. Beroe is unique in its exclusive focus on procurement. We enable procurement decision making in Fortune 500 companies by providing access to category specific market intelligence, risk management and green procurement services across the globe. INTELLIGENCE Deep Dive Category Reports Cost Models, Price Forecasts SOURCE Category Dashboards, Best Practices China, India, SEA Eastern Europe, Western Europe, N.A Latin America, Middle East, Africa SUPPLY RISK Supplier Risk Assessments Supply Chain Risk Enterprise Risk Management ETHICAL RISK Social Responsibility Endangered Species Illegal Sourcing GREEN Environmental Footprint
  • 3. Importance of Cement & Aluminum 67% 33% Fuel Grade Calcined Coke 75% 25% 0% 50% 100% 150% Aluminum Others Calcined Petcoke End-uses 60% 40% 0% 50% 100% 150% Cement Others Fuel Grade Petcoke End-uses World Petcoke Production • Together, cement and aluminum drive around 65% of global petcoke demand • However, both these industries are suffering from overcapacity currently
  • 4. Asia Rising ! • Asia has emerged as the global hub of both cement and aluminum manufacturing, which makes it the most important demand center for petcoke • Going forward petcoke dynamics would be dictated by the demand patterns in Asia, as it gains significance both in supply and demand of petcoke 48% 52% World Aluminum Production Asia RoW 67% 33% World Cement Production Asia RoW Strategic Shift in Supply & Demand of Petcoke 60% By 2015 DemandSupply By 2015 DemandSupply 17% 7-10% 15% The demand growth both in North America and Asia is expected to be driven by calcined petcoke used in aluminum industry
  • 5. Petcoke – Coal Duel in Cement 120 Million MT8 Billion MT Global Coal Market Global Petcoke Market Prevailing oversupply in the global coal market, is a serious impediment to petcoke demand improvement from cement industry in Asia Coal Supply Glut Overproduction in Indonesia US Shale gas revolution • Asian cement plants have a high dependence on coal • Global oversupply and declining coal prices provide little incentive to cement plants to import petcoke 66% 34% World Coal Demand Asia RoW Advantages of Petcoke over coal Lower Price Higher sulphur content Coal Prices have fallen to USD 90/MT levels, making them cost competitive with petcoke Petcoke emits 5 to 10% more CO2 than coal on a per unit energy basis But…
  • 6. Petcoke – Coal Duel in Cement : From an Indian Standpoint Declining global coal prices has reduced the difference in procurement cost between Coal India and imports from Indonesia to just around 15% for Indian cement companies. The difference was around 30-40% in 2012. Total Landed Cost (per MT) INR 1259 + FreightINR 1720 Sourcing from Coal India Sourcing from Indonesia Indonesian Coal Production Cost Indian Coal Production Cost 1 2 15% • The spread between domestic and imported coal is expected to further decrease to around 12-13% due to declining global coal prices • Despite shortage of coal from Coal India, cement companies can easily import slightly more expensive coal from Indonesia • The high production levels and lower production cost of coal in Indonesia is expected to keep price of Indonesian coal below the $100/MT levels, in the short term
  • 7. 17 7 6 0 5 10 15 20 25 30 35 MMT 2.7 3.5 2 0 2 4 6 8 10 MMT Asian Overcapacity ! Cement Aluminum Excess Capacity Expected by 2015 Excess Capacity Production 2.2 0.8 0.5 0 1 2 3 4 BillionMT China (2012) 240 60 25 0 100 200 300 400 MMT India (2012) China (2012) India (2012) Overproduction to continue in China Excess Capacity Expected by 2015 Excess Capacity Production Factors resisting demand Factors supporting demand Lack of substitutes for calcined petcoke Production and capacity cuts globally in aluminum Record low utilization rates in Asian aluminum & cement sectors Sustainability initiatives by Chinese government to reduce CO2 emissions
  • 8. Shift in Asian Steel Production Other Metals which Affect Petcoke - Steel 67% 33% Global Petcoke Production (2012) Fuel Grade Calcined Coke Basic Oxygen Furnace Electric Arc Furnace Key Petcoke Demand Drivers in Asia • Currently the contribution of steel to overall petcoke demand is lower than 5% • However, as Asian steel production shifts to using electric arc furnaces, the demand for petcoke from steel is expected to significantly increase • Also, petcoke is used as a substitute to amorphous graphite in the steel industry. Thus, during the winter season in China when most graphite mines are shut, petcoke is generally preferred by steel makers within and outside China. 1 Months PetcokeDemand November to March Low Medium High Seasonal Graphite Mining Trends in China2 75% 9% 16% End-uses of Calcined Petcoke (2012) Aluminum Steel (EAF) Others
  • 9. Asian Petcoke Demand Outlook Short Term Decreasing EU petcoke demand Coal supply glut Expected stagnation in Aluminum and Cement demand Increase in Asian fuel grade petcoke supply • Declining EU demand and rising Asian supply would lead to increased availability of petcoke in the global market • Acute overcapacities in the Asian cement and aluminum industries would prevent any dramatic rise in petcoke demand • Competitive coal pricing coupled with global supply glut makes coal attractive to Asian cement companies in the short term LowMediumHigh Impact Long Term Low per capita cement & aluminum consumption Anticipated demand from steel industry Strategic shift from west to east in petcoke industry CO2 emission reduction norms by Asian nations Demand Prospects Demand Prospects • Low per capita cement & aluminum consumption in Asia, would drive long term production growth of both materials • Pricing of petcoke is gaining increased transparency through new indices such as Platts and through shift of production from west to east • Stringent CO2 emission norms are expected to resist demand for petcoke in the long term
  • 10. Thank You