The US Petroleum Coke market displayed remarkable stability throughout March 2024 which stemmed from a balanced equation as demand remained steady, while supply followed suit. This even keel, however, masked underlying tensions within the shipping sector. The month began positively for Supramax ship owners in the US Gulf Coast (USG) region. Tight tonnage availability for immediate voyages led to rising freight rates on key routes. However, this enthusiasm was short-lived and by mid-March, the market reached a stalemate. An influx of new vessels entered the scene, coinciding with a steady stream of fresh Petroleum Coke cargoes. This created a wait-and-see approach, with charterers hesitant to commit while owners held firm on their pricing expectations.
March 2024 ended with an unchanged pricing dynamic for Petroleum Coke in the US market after experiencing a significant downtrend in the previous month. The month concluded on a somewhat negative note as the USG market witnessed a softening trend. The number of available ships continued to climb, outpacing the limited supply of Petroleum Coke cargo on primary routes. This imbalance put downward pressure on freight rates while the transatlantic segment, on the other hand, remained largely unchanged throughout the month. Henceforth, with the wait-to-see approach the market of Petroleum Coke admitted utter stability throughout March to settle the offered quotations at USD 438/MT Petroleum Coke Calcined Grade FOB USGC, USA.
While shipping costs fluctuated, the underlying price of Petroleum Coke itself has been on a downward trajectory in the previous timeframe. This decline was attributed to a falling Gas and Coal Prices. Cheaper alternatives have reduced the demand for Petroleum Coke as a fuel source previously which led created a negative market sentiment. Moreover, the Venezuelan huge sell-off exerted huge discounts in the Petroleum Coke market. Increased Petroleum Coke exports from Venezuela have flooded the market, putting downward pressure on prices. At a certain point, seasonal and regional instances influenced the outlook of the Petroleum Coke market. During the Chinese New Year, the demand from the downstream cement industry remained muted and the high stockpiles in India further dampened buying activity.
As per ChemAnalyst, the market of Petroleum Coke in the USA is expected to remain muted unless a significant surge in new cargo orders materializes. A more balanced distribution between Petroleum Coke cargo and available tonnage is crucial for any near-term improvement in freight rates. Moreover, the potential lifting of US sanctions on Venezuelan exports by April 18th, 2024, is expected to create uncertainty among some buyers, leading them to hold off on new contracts.
By Peter Schmidt
