European Petroleum Coke Market Maintains Stability Despite Venezuelan Sanctions

In July 2024, the Petroleum Coke market in Germany started a consolidation phase marked by muted trade activity and stable pricing. Despite the re-imposition of US sanctions, the Petroleum Coke is still reasonably priced, even though it was presently in the bottom of the low range. Amidst the cheaper coal and higher Amsterdam – Rotterdam – Antwerp (ARA) freight, the discount was just 36%. Nevertheless, because of US sanctions, Venezuela's shipments decreased, keeping Petroleum Coke prices unchanged in Europe. Particularly as the month comes to an end, downstream consumers' interest in buying product has been minimal. Moreover, the market was oversupplied due to the weak demand and a constant flow of imported Petroleum Coke into domestic ports. As a ripple effect, several producers were being cautious and choosing to hold onto their current prices rather than take a chance on lowering them which kept the market dynamics unchanged during July 2024.

The European Petroleum Coke market found a precarious equilibrium to settle at USD 358/MT Petroleum Coke Calcined CFR Hamburg on 26th July 2024. While the market has stabilized, underlying tensions and uncertainties continue to shape its trajectory. A key factor contributing to this stability has been the moderation of Petroleum Coke discounts. While prices have retreated from their peak, they remain at competitive levels, offering a degree of attractiveness to potential buyers. However, the market’s confidence has been tempered by the re-imposition of sanctions on Venezuela, a major Petroleum Coke exporter. Despite an initial dip in exports, the anticipated supply crunch has yet to materialize, possibly due to hopes of exemptions for Petroleum Coke shipments. This uncertainty has instilled a cautious approach among buyers, who were adopting a wait-and-see stance.

The price trajectory of Petroleum Coke has also been influenced by other forces. While the price decline has halted, the prospect of sustained growth was hindered by weakening downstream consumption. Moreover, declining crude oil prices, the primary feedstock for Petroleum Coke production, have exerted downward pressure on costs. Additionally, elevated shipping expenses triggered by the Hamburg port strike and disruptions in the Red Sea have further complicated the demand dynamics and several consumers were hesitant to place new orders.

As per ChemAnalyst, the Petroleum Coke market is expected to decline further in August 2024 on the back of discounts given by Venezuela. The dampening effect of high interest rates on downstream industries, such as cement manufacturing could soften an overall demand, and market sentiment remains guarded.