Category Archives: Calcined coke
Rain CII CEO Gerald Sweeney knows a thing or two about the calcined coke market.
Since the merger of Rain and CII about 7 years ago, Gerry has been steering the Rain CII ship through the highs and lows of the market, with great success. This week I was able to catch up with Gerry via phone, and asked him to share with us some of his wisdom. (The answers I show in these questions are from my notes, and are not direct quotes.)
What was 2013 like for Rain CII?
Last year was a down year for Rain CII, with lower volumes and lower margins compared to 2012. However, this was not unexpected, with the global aluminium price being so low and with smelter closures around the world. Operationally, the company performed well, and was operating at the mid to upper 80% utilisation rate. There were some birthing pains at the Lake Charles Co-Gen project, but again, this was not unexpected.
The major challenges facing the company in the coming year or two?
We can’t control the aluminium price, so all we can do is manage our own business really well. We will keep pushing on product specifications, keep cooperating with aluminium plants that allow us to use more marginal cokes. We have a great opportunity with our new asset in Rutgers, as they have a full lab facility for testing anodes using various grades of coke. Meantime, our shot coke technology is doing well, and we have more developments to come.
On the subject of Rutgers, many people ask if it will one day lead to Rain CII becoming an anode producer?
There is no way we would launch into an anode production facility unless it was with a smelter partner. I find it interesting how little the industry knows about what is still achievable with cokes that are available today. There is still a lot of low-sulphur, low-metals coke that is not going into calcining, but those cokes need a price environment that allows the industry to secure the coke on a sustained basis. Alternatively, there are cokes which some people refer to as non-traditional cokes, but first the industry needs to understand that these cokes can be used successfully. Over the longer term, properties have shifted out, but we need to keep making the case that there is still some room to move.
When it comes down to the bottom line, the industry has two choices – either the CPC price rises to allow calciners more flexibility to use low sulphur, low metal cokes, or the industry unlocks the coke specifications.
What’s your take on the Chinese calcining industry? We have seen some new capacity enter the market, but other projects have died on the vine.
Most of the new plants that have entered the China market are small scale plants serving the local market. So far, there has only been a small number of larger Chinese players in the international arena. But they will always face some fundamental problems. Shaft coke cannot be used on its own. It must be blended. But for as long as their green coke suppliers manage the calciners’ margins, they will be in a squeeze. The big refiners in China see the CPC price and want bigger and bigger slices. China will always be an important factor in meeting future demand, but its own aluminium industry could end up being the biggest determinant.
China’s anode exports rose by more than 20% last year. Do you see any threat that the world’s aluminium smelters could switch to an anode purchasing strategy?
That was an idea that was floating around a few years ago, when smelters were looking at ways of reducing costs. But I don’t think it has any attraction to them right now. If there was any interest, we would be seeing a long development time, but the logistics and strategic limitations of the idea make it unlikely.
Rain is listed in the Indian stock market. Is there any likelihood that we will see listings on other bourses?
It might happen in the distant future, but right now with the equities markets so down, there is no point. Certainly the Rutgers purchase gives us a diversification that makes us more attractive. Although CTP represents 50% of the output, from a revenue point of view the split is more like 30%/70% to Chemicals, so Rutgers gives us diversity in our revenue streams as well as products.
What’s your outlook for the coming year or two?
As the aluminium industry goes, so we go. It’s unlikely the metal price will rise by all that much, so the environment in which we operate will largely be unchanged. We will keep on with pushing the specs argument, managing costs and meeting our customers’ needs.
What’s the status on your project to build a calciner in India?
A decision to proceed will be made during the second quarter 2014.
Will we see you at TMS this year?
No. Unfortunately I can’t make it this year, but Rain CII will have a team there. We will have a team at the AZ China conference as well, so we are looking forward to that.
Many thanks to Gerry for giving me the time to interview him.
2013 is coming to an end and we will soon welcome 2014. We’d like to thank all of our clients for your support and wish all of you and your family a happy New Year!
More than half a year has passed since we officially launched the AZ China Calcined Petroleum Coke (CPC) Index and we are excited to see many of you are interested in contributing. CPC plays an important role in making primary aluminium, which roughly accounts for 10% of the total cash cost of production. However, different from other essential raw materials like alumina, there is no clear pricing methodology for CPC such as linking to the LME aluminium price. And within a depressed aluminium market environment, the room for adjusting power and alumina costs (the two major costs in making aluminium) as well as other raw materials such as CPC is limited. Real time market intelligence is critical for both CPC producers and consumers to negotiate fair deals.
The AZ China CPC Index (CPCX) is made up of actual transaction data. The Index requires both the seller and the buyer to add their transaction data into the index system and index program will then automatically confirm that both sets of data match. Our intention is to ensure the data is accurate yet still confidential.
The CPCX tracked two countries in 2013 and we hope to add more in 2014. One of the countries, India, saw the average monthly price remain relatively flat throughout the year with some downward pressure due to lack of demand from aluminium. The other country, China, saw the benchmarking price in Shandong and Jiangsu fluctuate drastically. Prices slumped substantially in February and gradually reached a bottom of US$334/t in June. Then prices rebounded and hit the year high US$415/t in August but soon adjusted downward and closed at US$342/t in October. We will notice our CPCX subscribers of future trends and developments in CPC in 2014.
If you are not yet a CPCX subscriber, but are interested in the CPC global market, it takes just 3 minutes to apply for a trial account. Click here to register and please contact email@example.com for questions.
We’re just two weeks away from the online petcoke event of the year. Register today to ensure your payment of just $99 will be received in time. Here’s the link: http://petcokeconference.az-china.com/register.html
It’s going to be a great time of discussion and info sharing!
Congratulations to the folks at Sinoway Carbon on the official opening of Phase 1 and launch of phase 2.
At a ceremony held a few days ago, about 100 guests watched as the ribbon was cut.
Phase 1 represents 280,000t capacity, and phase 2 will double that when it is finished in about 12 months time.
Dubal owns 20% of the operating company! and has already taken delivery of the first cargo of CPC.
The topics and panelists
Shale oil/tight oil
In the last 4 years, the USA has dramatically increased its output of domestic crude oil, thanks to the development of new technology to extract oil from geological rock formations such as shale rock.
Tight oil, of which Shale oil is one type, is now reaching 1 million barrels per day, and is forecast to double output. American oil refineries, especially those that produce anode grade petcoke, are now trying to figure out what to do about the rising influence of tight oil. Tight oil can deliver huge savings to a refinery, but the impact on each refinery’s petcoke production can be highly variable. Refineries that switch to Canadian Heavy oil will produce substantially more fuel coke, but those who switch to Eagle Ford or Bakken will produce a lot less coke. Some estimates predict that anode grade coke production call fall by more than half.
What is the full story on the shale oil phenomenon? What is the impact on green coke production, now and in the foreseeable future? How are calciners reacting now, and what additional challenges are ahead of them?
To examine these questions, we will be joined by:
Stuart Ehrenreich, Managing Director, Cascade Resources
Keith Neyrey, Customer Support Manager, Rain CII
In this session we will examine the new/old phenomenon of hydro treating the vacuum materials in Chinese oil refineries, and what this will do to the supply of green coke.
Sinopec have reportedly started experimenting with the use of hydro treating in a couple of its refineries. Although the technology is not new, its application in today’s environment represents a threat to coke output. Some have reported that Sinopec’s experiments have led to a petcoke output reduction of up to 30%.
We will learn what the other major petcoke producers are doing to improve their value products output, recognizing that increased light product output means decreased coke output. What is CNPC doing?
On a broader scale, we will look at China’s total petcoke supply picture. 2012 saw no growth in petcoke supply – what is the outlook for 2013, and 2014?
What is happening with imports and exports, and what about the talk of new Customs Tariffs on petcoke?
With the changes to the total supply side in China, what does this mean for availability for export? To what extent is China dipping into medium-high sulphur cokes to support its anode demand?
To examine these questions, we will be joined by:
Ji Yuan, Analyst at AZ China, and author of the monthly Black China Report
Wang Hao, Senior Engineer and Vice Director, Petrochina (TBC)
Anyone involved in the global calcined coke/anode business will be aware that calcining capacity has grown strongly in recent years. New projects in China have recently opened, while others in China, India, and the Middle East are in various stages of development.
This growth comes at a time when primary aluminium production is under pressure from low prices and lack of profitability. Outside China, the outlook is grim, with closures likely to exceed expansions for the next couple of years.
Meantime, inside China, new anode plants and new smelters are adding to the total demand, but from within China. What will that do to availability for the rest of the world? Will China’s domestic demand for anode grade coke, combined with lack of growth of this coke, cause shortages of coke? What does that do to the calciners that have recently been built or are due to enter the market?
Out of all this, where are prices heading? If petcoke prices rise, won’t that put a squeeze on calciners, especially as smelters are less willing than ever to pay more.
Finally, what does the panel think will happen with anode plant development? Is there any threat to the traditional model that sees each smelter having its own anode plant? What about tightening environmental regulations, and the decreasing availability of capital for furnace rebuilds? Will we soon see the day when global anode producers, perhaps based in China or elsewhere, are supplying multiple plants with their anodes from one massive ultra-modern anode plant?
To help us understand these questions, we will be joined by:
Mr Tony Botelho, Sales Manager, Sinoway Carbon, China
Dr Akram Madanat, formerly of Gasan Calcining Project, Saudi Arabia
In the first 3 topic areas, we have tried to address the major issues facing the petcoke industry right now. But that doesn’t mean there are no other topics to be examined. Some of these include:
- Fuel grade coke prices – will coal price drive fuel coke prices down?
- What of the talk that high sulphur coke imports will be taxed in China?
- What is happening in India? Will that country grow CPC exports?
- What is the price gap between CPC at 3% sulphur compared to lower levels of sulphur?
- How to obtain the best prices for CPC, and what about the new CPC Index services popping up?
To help us with this discussion, our panelists from the previous 3 sessions will be joined by Paul Adkins, Managing Director of AZ China and Oscar Mascarenhas of Goa Petcoke Consulting.
To register for this conference, go to the forum website and use the online registration page at http://petcokeconference.az-china.com/ (The registration page will be open on or before October 23.)
Last week we announced the Petcoke Online Forum, an important briefing on the latest developments in the petcoke market (see here for the original announcement.)
Here is some more information about the conference.
The AZ China Petcoke Online Forum
The Petcoke Online Forum is a key event not to be missed by anyone involved in supplying carbon into the world’s aluminium smelters.
In past years, there has been a conference held (The Fall Petcoke Conference) which has allowed participants a chance to update themselves with the latest developments in the market. This year, the conference is being held by AZ China, the world’s leading carbon consulting company.
AZ China believes it is vitally important to provide this forum at this time. There are some serious changes occurring in the petcoke market, and we feel it is essential that market participants keep themselves abreast of the latest developments.
This conference will be held online. AZ China recognises that it is difficult at this time of year for participants to find the budget to travel, especially to conferences. But this conference will allow you to participate from the comfort of your office or home.
We are delighted to announce that Rain CII is our sponsor for this event. In the words of Rain CII’s Vice President Commercial, Ron Garbarino, “Rain CII applauds AZ China for trying something different in the conference space, and we look forward to participating.
How it works
Simply go to the AZ China website and click on the tab for the Petcoke Online Forum. There you will find the registration page. Once you have registered (there is a small $99 admin fee), you will receive a password.
Once each session of the conference starts (you will receive an email alerting you that it is about to start), simply log in, enter your password, and join the discussion.
Because participants will be coming from multiple time zones around the world, the conversation will be there waiting for you when you log in. Post your comments and questions, and if you are in the same time zone as the moderator and panelists, you will get answers and responses immediately. It’s that simple.
To help you learn more about each panelist and the particular point/s that they want to make, most panelists will prepare a short video. The video will contain a brief introduction to themselves, and a quick explanation of the key points they want to make. We suggest you watch the video before joining the conversation.
When will it be held?
The AZ China Petcoke Online Forum will be held November 12 to 14, Beijing time. However, if you are in the USA or a country with a time zone behind the time zone in Beijing, it will start a little earlier for you.
Important note: Each Live Forum will run for approximately one hour, while the session will run for at least 24 hours.
Session Topic Beijing Houston Dubai
time time time
1 Tight oil/Shale oil Tues Mon Mon
08.00 19.00 24.00
2 China petcoke Tues Mon Tues
16.00 03.00 12.00
3 Calcined coke Wed Wed Wed
16.00 03.00 12.00
4 Open Forum Thurs Wed Wed
08.00 19.00 24.00
In the next post, we will talk about the topics and panelists.
Over the last several years, there has been a “Fall Petcoke Conference” held somewhere around Asia, with the last one being held in Hong Kong last October.
This year, AZ China is offering our own petcoke conference, but this conference is going to be unlike any other you have attended. It will be held online.
The Petcoke Online Forum will be held November 12 – 14, and will be held in the comfort of your own office or home.
We at AZ China believe it is a vital time to get up to date with what is happening in the petcoke world. The recent announcement by Valero in the USA only highlights what is likely to get worse. Anode grade petcoke is about to go short, perhaps critically short. To the situation with Shale Oil and Tight Oil developments in the USA, add the increased use of hydro treating in Chinese oil refineries, and you have a potentially “tectonic” shift in the market balance of anode grade petcoke.
Fuel grade coke prices are also set for a roller coaster ride. China is likely to set import duties on high sulphur petcoke in 2014, but coal prices are set to fall. For as long as the calorific value connection is maintained, that will drive fuel coke prices down.
In the calcined coke world, new calciners are starting to impact the market. Some projects have been delayed or cancelled, but meantime, new capacity in calcined coke, and especially in anode manufacturing capacity.
In short, if ever there was a time to keep ahead of the curve, this is it. AZ China recognises this, and has decided to step into the breach.
To help us arrange this event, we are delighted to announce that Rain CII has agreed to sponsor the Petcoke Online Forum.
So, how does it work? Simple. We will shortly make a registration page available. Register your details and receive your login password. On the day, go to the forum site (we will provide the special link), and join the conversation. Because participants will come from all sorts of time zones, the conversation will be there waiting for you no matter where you log in from. (There’s a small admin fee of $99 with registration.)
Best of all, no need to find extra budget for travel or accommodation costs. No need to find a week out of your busy diary. An online forum will not have the networking opportunities that a physical presence does, but the AZ China Aluminium and Carbon conference in May 2014 will give you that opportunity.
In a separate post, I will give you more information about the line up of speakers and the topics we will cover.
If you don’t want to wait with registering for this important and innovative event, you can write to me at firstname.lastname@example.org to pre-register. The office is closed this week for China Golden Week, but we will process your registration when the office re-opens.
Many of you know that we launched an online CPC index service recently called CPCX. We have just finished upgrading it from a China index to a WW index. This index provides registered users with actual transaction price data uploaded confidentially from other buyers and sellers of CPC.
If you buy or sell CPC or have an interest in the CPC market, sign up for a free trial and check out the new changes today.
Hot off the presses – edition 1 of the SPH report!
Available only to Black China Report subscribers, the Semester Pricing Handbook (SPH) can be used to assist you with your calcined coke purchases, especially from China. We have specifically designed this tool to be useful for both sides of the negotiation. It doesn’t matter if you are a buyer or seller, you need to be well prepared.
We know that many of you have to trawl through numerous reports and studies to extract the information you need. So we thought we would do it for you. Hopefully we can free you from the task of extracting data, giving you more time to analyse data and make good decisions.
This data-packed excel will be updated on a quarterly basis, contact us for a sample.
If you are a buyer or seller of Calcined Petroleum Coke (CPC), this index was made particularly for you; however, others in the industry will no doubt find it useful as well. The index shows actual CPC transaction prices on a weekly, monthly, and quarterly basis for five different grades of CPC within China’s three major CPC regions.
All CPC buyers and sellers who register and input data this month will have a year of free access to the index. Register for a free trial to learn how it works via our website http://az-china.com/CPCX/login.php or contact us with questions at CPCX@az-china.com.