Global petcoke markets turn bearish as Indian cement makers switch to cheaper coal

• Petcoke prices decline by $5-6/t, further downside expected
  
  
• Producers lift cement prices by INR 12-13/bag to protect margins
  
  

The global petroleum coke market is showing clear signs of strain. After weeks of tight supply and rising prices driven by the Middle East conflict, demand is now faltering -- particularly in India, the world's largest petcoke-importing nation for the cement industry. Buyers are turning away from expensive petcoke and toward cheaper thermal coal, forcing suppliers to rethink their pricing strategies.

Indian cement producers pivot to thermal coal

The most significant shift is happening in India's cement sector. Company after company is reducing petcoke consumption, driven by simple economics: thermal coal has become too cheap to ignore.

According to Nuvoco Vistas' Q4FY'26 earnings call, the company's blended fuel cost for petcoke increased from INR 1.84/Mcal to INR 2.01/Mcal. In response, the company is actively reducing its dependence on petcoke. In the east, petcoke consumption is expected to decline by 300-500 basis points. In the north, it is being reduced from 50-60% to approximately 45%.

Conversations with major cement producers on 17-24 April reveal a clear picture.

On 17 April, a major cement producer noted that US petcoke deals were not happening due to a wide bid-offer gap, with 2-3 shipments from Oman being offered to India at $145/t. The same producer stated there was no supply from Saudi Arabia after the war and that the company was not using petcoke at all, instead using US NAPP coal at $140/t. Another producer reported the imported petcoke market was subdued, with an offer at $166/t and a bid at $151/t.

By24 April, the price erosion was undeniable. A cement producer stated that prices had softened by $5-6/t due to lower freights. Another said that prices should drop further, with market indications at levels up to $150/t, noting that alternatives, including US thermal, Russian thermal, and domestic coal, were available. A third producer expected buying levels to touch $145/t, hearing US thermal around $135/t, and noted that one cement producer had booked a Panamax US thermal cargo at $135/t.

Why demand for petcoke has turned subdued

Several factors have aligned to make petcoke less attractive. First, the Middle East war disrupted supply, with buyers noting no supply from Saudi Arabia after the closure of the Strait of Hormuz. Second, US thermal coal became a viable substitute, with high-CV US NAPP coal heard at $135/t. Third, domestic coal remains plentiful and price-regulated.

The result is a clear downward trend in prices, with the bid-offer gap narrowing but the entire price range shifting significantly lower.

What refiners and traders are saying

Traders are reporting a sharp pullback in buying inquiries. One trading firm noted "limited buying inquiries" on 17 April. By 24 April, the same firm observed that "US NAPP offers have come down, so has pet coke."

In Turkiye, cement plants have shifted toward thermal coal. Russian coal is available below $100/t CFR Turkiye, making it far more competitive than petcoke. Some Turkish buyers have secured Russian coal cargoes.

In the US Gulf, high-sulphur deal activity was muted. One source noted limited supply for April-loading vessels. For mid-sulphur coke, deals were heard in a wide range, from the low $100s/t to the low $120s/t FOB, though some cargoes were small or for prompt loading.

In China, the high-sulphur fuel-grade coke market remained quiet, with elevated prices prompting most buyers to focus on drawing down existing port stockpiles.

Indian cement makers pass rising costs to consumers

Despite the sharp increase in fuel costs, Indian cement makers have successfully passed on the burden to consumers by raising cement prices. According to channel checks, pan-India prices in the non-trade segment have risen by INR 20-25 per bag. In the trade segment, prices have risen by approximately INR 10 per bag. On an average basis, prices have increased by about INR 12-13 per bag in April.

The industry is reportedly planning an additional price hike of INR 10-15 per bag across both segments in the coming days.

This demonstrates that cement manufacturers have been able to protect their margins despite the squeeze from higher fuel costs -- at least for now.

Nuvoco's strategy: A window into industry thinking

Nuvoco Vistas currently maintains a fuel mix of 53% coal, 37% petcoke, and 10% alternative fuels (AFR). It aims to increase AFR share to 12-13% by FY'27. Blended fuel cost is expected to rise to INR 1.51-1.55/Mcal in Q1FY'27. The company has 6-8 weeks of petcoke inventory, with new shipments not expected until July-August 2026, meaning the full impact of current lower prices may not be felt until Q2FY'27.

On capacity, Nuvoco Vistas is executing a 4 million tonne (mnt) debottlenecking in the East, with total capex of INR 9 billion in FY'27 and INR 9.6 billion in FY'28.

UltraTech's expansion: A counterpoint

While the near-term focus is on cost pressures, the long-term story remains one of growth. UltraTech Cement has crossed a key milestone, with Indian capacity exceeding 200 mnt per annum after commissioning three grinding units of 8.7 mnt capacity. The company's domestic capacity now stands at 200.1 mnt, with consolidated global capacity at 205.5 mnt. Ongoing capex of INR 16,000 crore is expected to take total capacity to over 240 mnt. This expansion will require sustained fuel consumption, whether petcoke or coal.

Outlook

For the near term, BigMint expects petcoke prices in India to face continued pressure. Key factors to watch include the trajectory of US thermal coal prices, the reopening of the Strait of Hormuz, the monsoon season, and the pace of UltraTech's expansion.

As one trader put it: "Barring any geopolitical upheaval or new disruptions to supply or freight rates, petcoke prices are expected to be under pressure amid persistently weak demand and competitive offers of high-CV thermal coal."