What Is Petcoke and Why Is India Importing It from Venezuela for the First Time

For the first time, the Indian firms are importing substantial volumes of petroleum coke from Venezuela. Trade sources and shipping data indicate as the OPEC nation encourages exports. Petcoke, a by-product from oil refining and a substitute for coal, is preferred by India due to the wave in the global prices of coal. In this article, we will discuss petcoke import data of India and why India imports it from Venezuela.

Indian Producers Shift to Venezuela for Petcoke Supplies

The surge in global coal prices has initiated Indian cement producers to turn to petcoke instead with the country importing substantial volumes from Venezuela for the first time. According to sources, trade data of India imported at least four shipments of 160,000t of petcoke from Venezuela, reaching India between April-June 2022. A further 50,000t cargo is due to reach Mangalore, India, over the coming days and a 30,000 shipment is expected to depart Venezuela for India.

Although India has historically imported petcoke from the US and Saudi Arabia, reports indicate that the more competitively priced Venezuelan shipments could shortly displace some of these cargoes. Among the Indian cement producers opting to import petcoke from Venezuela are JSW Cement, Ramco Cements, and Orient Cement, says LiveMint. Although petcoke is more expensive than coal, it produces more energy when burnt and the Venezuelan supplies are considered high quality and very low in sulphur.

The growing exports of petrochemicals and oil by products by both public and private enterprises in South America might raise the producer’s cash flow, and shipments from conventional suppliers might be substituted by Venezuelan supply because of their lower prices.

Ramco Cements Chief Financial Officer S. Vaithiyanathan expressed, “The quality of petcoke is really good and it has very little sulfur.” The drawback is that the shipments take over 50 days to reach India. According to Vaithiyanathan, Ramco Cements contained two 50,000-ton cargoes of Venezuelan petcoke that were delivered in June and July at a price that was $15 to $20 a tonne less than the market rate.

Ramco paid $214.40 and $221 per tonne for the June and July cargoes, respectively, while Orient imported about 28,300 tonnes in April for $220 per tonne, Indian customs documents examined by Reuters showed. JSW Cement imported over 30,000 tonnes in June, according to two trade references, ship tracking data, and customs documents.

Know About Petcoke

Petroleum coke or petcoke is a final carbon-rich solid material and residual scrap material removed from oil refining. It is a spongy, solid residue from oil distillation that can be burned for fuel equivalent to coal. Petcoke is an alternative for coal and contains high energy content. It is classified as a “bottom of the barrel” fuel because it is acquired after refining coal to remove lighter fuels like petrol.

There are four basic kinds of petroleum coke, needle coke, honeycomb coke, sponge coke, and shot coke.

Further, Petcoke has been manufactured since the 1930s for the production of aluminum, steel, glass, paint, and fertilisers. Also, it is also utilised as fuel by cement kilns, power plants, and other industries.

Indian Firms Importing Pet Coke from Venezuela

For the foremost time, large amounts of petroleum coke are being imported by Indian firms from Venezuela. From April to June of this year, Indian cement manufacturers obtained at least four cargoes summing 1,60,000 tonnes of petroleum coke, according to three trade references: Refinitiv ship tracking data; and Venezuelan shipping schedules.

India’s rising importance for pet coke from Venezuela is being fueled by a rush for inexpensive fuel to power factories as coal prices climb globally. Since the Russia-Ukraine war, the price of coal has increased to all-time highs, pushing Indian cement producers like JSW Cement, Ramco Cements Ltd., and Orient Cement Ltd. to import pet coke from Venezuela.

According to the trade data of India, Pet coke from Venezuela is reportedly being traded at a discount of 5–10% compared to pet coke from the United States, according to Indian traders and officials from a cement business. The producer’s cash flow may enhance as a result of the growth of South American petrochemical and oil by product exports, and shipments from traditional suppliers may be substituted by Venezuela’s more affordable supply.

Petcoke Import Data of India

Pet coke cannot be imported for use as fuel, according to a notification from the Directorate General of Foreign Trade (DGFT) dated August 17, 2018. Only the cement, lime kiln, calcium carbide, and gasification sectors, when utilised as the feedstock or in the production procedure under real user essentials, are permitted petcoke import data of India, which finishes around 27 million tonnes of pet coke annually and is the world’s biggest user, imports more than half of this amount, especially from Saudi Arabia and the United States. Indian Oil Corporation (IOCL), Reliance Industries, and Bharat Petroleum Corporation are the various regional producers (BPCL).