Petcoke-coal discounts slip as coal prices drop but freight prices rise

By Frank O.Brannvoll, Brannvoll ApS, Denmark

Petcoke prices have been slightly under pressure from higher freight prices but remain stable. Following a drop in coal prices, discounts have slipped and are back in the inexpensive end of the neutral zone.

On 23 July 2024 the discount for 6.5 per cent sulphur petcoke FOB sold at US$64 is 52 per cent when compared with API4 coal sold at US$106 in the 3Q24. The CIF ARA 6.5 per cent petcoke contract sold at US$89 is at a discount of 34 per cent when compared with API2 coal sold at US$108 in the 3Q24.

Coal FOB price trend, January 2010-21 July 2024: API 4 Richards Bay 6000kcal/kg (black), 6.5% sulphur USGC 40HGI

(red) and 4.5% sulphur USGC 40HGI (blue)

Petcoke with 6.5 per cent S is expected to move within the US$62-70 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 US$38 with multi-year support at US$38. For 2024 a broad range of US$60-115 is forecast.

Freight prices are up strongly in the ARA segment since last month as the fall out from Israel’s attacks on Houthi in Yemen, is setting a premium on transport. USGC ARA freight rates were at US$25 on 23 July 2024.