India buys discounted Venezuelan petcoke to replace coal
16/08/2022 06:59
By Sudarshan Varadhan and Marianna Parraga
CHENNAI/HOUSTON, Aug 16 (Reuters) - Indian companies are
importing significant volumes of petroleum coke from Venezuela
for the first time, trade sources and shipping data show, as the
OPEC nation boosts exports not specifically targeted by U.S.
sanctions.
India's growing appetite for Venezuela's petcoke – a
byproduct from oil upgrading and an alternative to coal - is
being driven by a scramble for inexpensive fuel to power
industries as global coal prices have surged.
This could boost cash flow for the South American producer,
where state and private companies have increased exports of
petrochemicals and oil byproducts, and the more
competitively-priced Venezuelan supplies could displace cargoes
from traditional suppliers.
Indian cement companies imported at least four cargoes
carrying 160,000 tonnes of petroleum coke from April to June,
according to three trade sources, Refinitiv shiptracking data
and Venezuelan shipping schedules.
Another 50,000-tonne cargo is expected to reach the port of
Mangalore on India's south western coast in the coming days
while a 30,000-tonne shipment is scheduled to depart later in
August, the data showed.
India, which counts the United States and Saudi Arabia as
major petcoke suppliers, received its first ever cargo from
Venezuela in the beginning of 2022, according to two of the
sources and the documents.
A surge in global coal prices to record highs since the
Russia-Ukraine war has pushed Indian cement makers including JSW
Cement, Ramco Cements Ltd TRCE.NS and Orient Cement Ltd
ORCE.NS to import petcoke from Venezuela, trade sources said.
"The quality of petcoke is very good and it has very low
sulphur," Ramco Cements Chief Financial Officer S.
Vaithiyanathan said, adding the downside is that the cargoes
take nearly 50 days to arrive in India.
Ramco Cements booked two 50,000-tonne cargoes of Venezuelan
petcoke, which were delivered in June and July at a discount of
$15-20 per tonne to the market price, Vaithiyanathan said.
Ramco paid $214.40 and $221 per tonne for the June and July
cargoes, respectively, while Orient imported about 28,300 tonnes
in April for $220 per tonne, Indian customs documents reviewed
by Reuters showed.
JSW Cement imported over 30,000 tonnes in June, according to
two trade sources, ship tracking data and customs documents.
JSW Cement and Orient did not immediately reply to requests
for comment.
SUPPLIERS
The petcoke cargoes were shipped in April-June by Shimsupa
GmBH, a Germany-headquartered scrap trading firm, which has an
exclusive arrangement with Switzerland-based Maroil Trading to
supply Venezuelan petcoke to India, China, Pakistan and Turkey.
"We are exclusive partners of Maroil Trading AG and have all
necessary approvals of OFAC and the German government,"
Annamalai Subbiah, who owns 100% of Shimsupa, told Reuters.
Annamalai confirmed supplying Venezuelan petcoke cargoes for
Ramco, Orient and JSW Cement.
The cargoes were shipped from Venezuela's main oil terminal
of Jose, according to the sources and documents. Maroil has in
recent years revamped petcoke operations to increase export
capacity.
Maroil, owned by Venezuela-born shipping magnate Wilmer
Ruperti, did not immediately reply to a request for comment. The
U.S. Treasury Department, which has so far not targeted
Venezuelan exports of petrochemicals and byproducts, declined to
comment.
Venezuela's oil sector has been under U.S. sanctions since
2019. Washington imposed sanctions on the country's most
important global business as the former Trump administration
ratcheted up its bid to force socialist president Nicolas Maduro
out of power.
Higher Venezuelan supplies have weighed on global prices
this year, according to petcoke traders in Houston.
"Those extra supplies have had an impact on the global
market," one of the traders said. "They are increasing the offer
and diversifying Venezuelan cargoes' destinations."
Venezuelan petcoke is being offered at discounts of 5-10% to
petcoke from the United States, Indian traders and cement
company officials said.
A tonne of petcoke is more expensive than coal, but produces
more energy when burnt. It is generally not used as fuel because
of toxic emissions, but is widely used by the cement industry -
its largest consumer, as sulphur dioxide emissions are absorbed
by limestone.
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India's petcoke use and imports https://tmsnrt.rs/3w5nNEs
India's petcoke use and imports https://tmsnrt.rs/3w8unKq
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(Additional reporting by Matt Spetalnick in Washington; Editing
by Florence Tan and Jacqueline Wong)
((Sudarshan.Varadhan@thomsonreuters.com; +919810393152;
Twitter: https://twitter.com/sudvaradhan @sudvaradhan;))