India: Petcoke prices slide as cement buyers retreat; US coal loses ground ahead of monsoon

• August cargoes draw attention
  
  
• Cement producers delay purchases
  
  

India's imported petcoke market has entered a sharp phase of correction, with delivered prices falling rapidly over the past three weeks as buyers retreat from the spot market ahead of the monsoon season.

The decline comes at a critical time for India's cement industry, the country's largest petcoke consumer. Comfortable fuel inventories, slowing seasonal demand and expectations of further price weakness have reduced procurement activity, leaving sellers under growing pressure.

The correction is also reshaping fuel economics, with petcoke regaining competitiveness against US Northern Appalachian (NAPP) coal after spending much of the past year at a significant premium.

Petcoke correction gathers pace

Imported US-origin petcoke was assessed around $145-150/t CNF India during mid-May. By the end of the month, offers had fallen to $137-142/t, while buyer indications moved closer to $130/t.

The weakness mirrors developments in international markets.

Recent fuel-grade petcoke assessments placed CFR India 6.5% sulphur petcoke at $135.50/t, down from a May monthly average of $148.75/t. FOB US Gulf Coast 6.5% sulphur petcoke fell to $79/t, reflecting weakness across the supply chain.

Cement buyers remain on sidelines

Most cement producers appear adequately covered for the coming months and see little urgency to commit to fresh purchases.

Market participants reported inventory cover extending well into the third quarter, with procurement strategies focused on consuming existing stocks rather than replenishment.

The approaching monsoon is reinforcing this caution. With construction activity expected to slow seasonally, many buyers are delaying purchases in anticipation of lower prices.

Some participants indicated interest is already shifting toward August-delivery cargoes rather than prompt shipments.

Petcoke regains competitiveness against US NAPP coal

The recent decline has materially improved petcoke's position within the cement fuel mix.

Current market indications place imported US NAPP coal in western India around $150-160/t delivered, compared with petcoke offers near $137-140/t CNF India.

The advantage becomes more pronounced on an energy-adjusted basis. Petcoke typically offers 7,500-8,000 kcal/kg compared with approximately 6,900 kcal/kg for US NAPP coal, allowing cement producers to generate more thermal energy per tonne of fuel consumed.

Domestic coal availability also remains comfortable, reducing the need for aggressive imported fuel purchases.

As a result, petcoke is once again emerging as one of the most competitive imported fuels available to Indian cement manufacturers.

Margin relief may come with a lag

The benefits of lower petcoke prices are unlikely to be immediate.

Most large cement producers maintain fuel inventories covering 60-90 days of consumption, meaning current operations still rely partly on higher-priced fuel purchased earlier in the year.

Nevertheless, if current price levels persist through the monsoon quarter, producers could begin to see meaningful fuel cost relief during the second half of FY27.

BigMint view

The Indian petcoke market has shifted firmly into a buyer's market.

Falling international prices, comfortable cement-sector inventories and seasonal demand weakness are combining to pressure sellers. More importantly, petcoke is regaining competitiveness against US NAPP coal, reversing a trend that had encouraged greater coal consumption across parts of the cement sector over the past year.

With buyers adequately covered and monsoon-related demand weakness approaching, procurement activity is likely to remain limited in the near term.

Unless international energy markets tighten materially, petcoke prices are expected to remain under pressure through the monsoon quarter, with the $130/t CNF India level increasingly emerging as the threshold where meaningful buying interest could return.