Petcoke markets and the cement industry

Conventional fossil fuels account for around 80 per cent of fuels used in cement kilns worldwide, of which petcoke accounts for a 40-45 per cent share. Ahead of the Argus Petcoke Live virtual conference, we share some insights into the petcoke and refining market alongside views from the cement industry and the positive steps it is taking on environmental initiatives.

Interview with Steve Weber, VP of Americas Consulting, Argus
How has the refining sector been hit by COVID-19 and oil price volatility?
SW: The sector has been hit hard by the pandemic. The IEA forecasts that oil demand in 2020 will be down by nearly 9mn b/d from 2019, a drop of nine per cent. What is also difficult is that plants are having to operate at 75-80 per cent utilisation — one of their most profitable products, jet fuel, has been severely impacted by the crisis in the airline industry, and the sharp decline in overall demand for products has pushed refinery margins into negative territory since March. The US has already seen more than 400,000 b/d of refining closures, with several refineries poised to be converted into renewable fuel production facilities [the Wyoming and California plants].

What are the key issues to look for amongst refiners over the coming 12 months?
SW: The key questions are: Will demand for gasoline recover as the global economy reopens? Or will more companies decide that working from home is acceptable and employees will spend much less time and fuel commuting? Will there be a second wave of COVID-19, resulting in economic lockdowns being renewed? And how long will it take the airline industry to recover?

What current and emerging trends do you see giving the sector upside in 2020-21, despite the COVID-19 crisis?
SW: Global oil supplies from non-Opec countries are poised to fall, as drilling is at 30-year lows, so prices are poised to slowly rise. The weaker players in refining are likely to shutter capacity, allowing other surviving refiners to increase operating rates and profitability. If there is not a second wave of COVID-19, the economic rebound should be strong, and if an effective vaccine is developed and widely available, the world will adjust to a new normal. The current crisis will slow down new refinery projects in later years.

What do you hope to gain from attending the Argus Petcoke Live virtual conference?
SW: The decrease in refinery utilisation and lower heavy crude oil availability as Opec tries to sell higher valued light crudes has actually tightened the Petcoke market. I am interested in hearing from industry experts on their thoughts on where the market is headed in 2021.

Interview with Eugenio Blazquez, Head of Fuels at LafargeHolcim
How is the cement industry responding to environmental pressures?
EB: LafargeHolcim currently sources 20 per cent of its energy from alternative fuels, low-carbon fuels and biomass. In some of our operations, we have met over 90 per cent of our energy require­ments with alternative fuels. These alternative energy sources not only help reduce our CO₂ emissions, they also divert waste from incineration or landfill.

Apart from our ongoing activities to reduce CO₂ emissions, reducing emissions from cement production to zero will require carbon capture and usage or storage (CCUS). The IEA Roadmap for the cement sector projects CCUS to begin at scale from 2030 onwards. LafargeHolcim is currently working with a number of partners on five projects in four countries and plans to increase that number in the coming years. The potential carbon capture capacity from these projects is ap­proximately 2Mt of CO₂/yr.

Interview with Roberto Schurmann, Global Head of Trading, Votorantim Cement Trading
What is the greatest challenge facing the cement industry today?
RS: Reduction of CO₂ emissions and producing cement with less clinker content [ie greener cement].

How is the cement industry responding to environmental pressures?
RS: By adopting new technologies like carbon capture and reduc­ing the use of fossil fuels. Also, by increasing the use of alter­native fuels — we provide a service to the society by burning material that would go to landfill.

Why do you think this event is important to the industry, especially at this time?
RS: With current travel restrictions and social distancing, a virtual event is an opportunity to get information. It is also important to transmit to the market what the cement industry is doing to tackle environmental issues.

Argus Petcoke Live – Virtual Conference will be held on 22-24 September. International Cement Review subscribers can save 10 per cent off the standard rate by quoting code CEMNET10 when registering online. Visit the event website to view the agenda and register.