US Petroleum Coke Market Remains Stable during August 2024 Amidst Global Uncertainties

The US Petroleum Coke market has experienced a period of relative stillness in August 2024 followed by July 2024 on the back of equilibrium maintained between supply and demand dynamics. Despite increased freight costs due to ongoing conflicts in the Red Sea and Israel, which typically drive-up commodity prices, Petroleum Coke prices have remained stable. Sellers have consistently offered discounts to offset these rising transportation costs. Additionally, the decline in coal prices, a competitive fuel has made Petroleum Coke a less appealing option for buyers, further contributing to price stability. As coal becomes more competitively priced, demand for Petroleum Coke has weakened, leading to lower discounts and a cautious market sentiment. Moreover, the decrease in crude oil prices, the primary feedstock, has lowered manufacturing costs significantly in the first half of August 2024.

While Petroleum Coke prices have remained stable, market participants remain cautious due to weakening demand. Businesses were adopting a wait-and-see approach, leading to reduced overall consumption during this timeframe. This cautious outlook has helped to maintain price stability but also limits potential upward price movements which settled at USD 382/MT Petroleum Coke Calcined Grade FOB USGC, USA on 16th August 2024. As per the market reports, Venezuela's export levels have declined slightly, but the overall Petroleum Coke supply remains sufficient to meet subdued demand. Moreover, Petroleum Coke and coal cargoes on transatlantic and front-haul routes have provided strong market support. Additionally, heavy discounts, coupled with declining coal prices, have further incentivized Petroleum Coke consumption. This situation suggests that the US may have excess production capacity, leading to increased availability of stocks. However, logistical challenges, including hurricane-related production disruptions, a shortage of tonnage due to extreme weather and flooding, and potential disruptions caused by the escalating conflict between Israel and Iranian-backed proxies, have somewhat hindered the smooth supply of Petroleum Coke. The deteriorating economic conditions for US manufacturers, as evidenced by the decline in new orders, further contribute to the cautious sentiment in the market.

As per ChemAnalyst, while the current situation may seem stable, the Petroleum Coke market remains fragile. Any significant changes in freight costs, coal prices, or crude oil prices could disrupt the delicate balance could lead to an upward price trajectory in the upcoming weeks. Additionally, the ongoing economic uncertainty could further impact demand, affecting both prices and market sentiment. The recent developments in the Middle East, particularly the increasing likelihood of Iran's direct involvement in the conflict, could further disrupt supply chains and impact Petroleum Coke prices.