Russia-Ukraine Conflict impacting severely the Indian Petroleum Coke Market
- 13-Apr-2022 9:24 AM
- Journalist: Kim Chul Son
The Russia-Ukraine war has had such a massive impact on the Indian economy that it started to strangle demand, slowed trading, and even caused a huge amount of job losses. The Indian petroleum coke industry is among many victims of the ongoing war in Eastern Europe. Despite Russia accounting for only 1.9% of India’s petroleum coke imports, the war still affects India owing to Russia's stronghold on natural resource supply worldwide.
India doesn’t rely on Russia for natural gas, but the Metal productions (like Aluminum and Steel) still use pet coke as the feedstock. Russia is among the largest exporters of Aluminum and Steel. The conflict between the two countries has disrupted the Russian export, putting a lot of pressure on other big exporters of these metals like India and the UAE. This need to increase the production of Aluminum and Steel in India has ultimately increased the demand for Petroleum coke in India, as metal refineries are one of the few sectors that use Petroleum coke as a feedstock. The downstream cement industry doing well in India also abets the upward price trend of Pet coke in the Indian market.
The downstream Steel industry in India has increased its commodity prices up to 10% - 15% to compensate for the high feedstock price. TATA Steel depends on Russia for almost 15% of its Petroleum coke needs. Another Giant sector that has been hit is the Cement industry. Petroleum coke costs around 60% of the overall costs of the Indian Cement Industry.
As per ChemAnalyst, the Petroleum coke prices in India are high owing to the current geopolitical situation. It is expected to reduce as India eyes to buy Russian oil at a discount, easing the production cost of pet coke. Since the deals between countries are complicated and the fate of this war is unclear, it may contribute to India's volatile petroleum coke market further.