Indian cement producers prefer imported petcoke
Cement producers in India continue to prefer better-quality imported petcoke at US$92/t, despite its price being double that of Indian coal, according to the Business Standard.
Petcoke prices rose to US$95.75/t at the end of December and fell to US$80.50/t in early February before rising to US$92 at the end of March, S&P Global Platts was quoted.
Recent auctions by Coal India yielded disappointing results as around three times more coal than petcoke is required to produce one tonne of cement. “Petcoke has a heat value of 8000kcal, while that of Indian coal is 3500kcal,” said Mahendra Singhi, CEO of Dalmia Bharat.
Coal India sells coal at INR1500-1700/t (US$23.11-26.20/t). However, transport costs to cement plants in Rajasthan, Tamil Nadu, Andhra Pradesh and Chhattisgarh and the clean environment cess of around INR400/t drive up the cost of local coal, making it more expensive than imported petcoke.
“The cess is the key reason why cement companies have stayed away from recent coal auctions,” a Coal India executive said. HM Bangur, Shree Cements’ MD, said, “Considering the cess and transportation costs involved in using domestic coal, the industry’s preference for petcoke will continue.”
Shree Cements recently secured a 60,000t supply of G11 grade coal from Coal India subsidiary South Eastern Coalfields, at INR970/t for its Chattisgarh plant. Mr Bangur said the local coal would translate into a marginal cost reduction at the plant.
Dalmia Bharat will also continue to use petcoke over coal. Mr Singhi said cement plants in the south, with access to ports, would continue to depend on imported petcoke.
