Petcoke discount remains in cheap zone with good potential

By Frank O. Brannvoll, Brannvoll ApS, Denmark

Coal moved higher on the back of geopolitical tensions and was supported by oil and gas prices. Petcoke FOB picked up slightly from last month’s price but is trapped in the high US$60s. Discounts increased and petcoke increased from lows at US$62. On FOB and ARA bases, the petcoke discount remains in the cheap zone and offers good potential. The discount on ARA rose to cheap petcoke on increasing API2 and falling petcoke with freight USGC ARA at US$19.

Petcoke discount offers good potential

Petcoke with 6.5 per cent S is expected to move within the US$60-70 range with resistance at US$68, US$75, US$95, US$105, US$115 and US$135. Support is at US$60, US$55, US$45 and 38 with multi-year support at US$38. For 2024 a broad range of US$60-115 is forecast.

The discount for 6.5 per cent sulphur petcoke FOB sold at US$67 is 54 per cent when compared with API4 coal sold at US$117 in the 3Q24. The CIF ARA 6.5 per cent petcoke contract sold at US$86 is at a discount of 42 per cent when compared with API2 coal sold at US$119 in the 3Q24. USGC ARA freight rates are at US$19.