Global Petroleum Coke Price Falls for May 2023, as Construction Industry Faces Challenges

In May 2023, the global market witnessed a significant decrease in the price of Petroleum Coke (Pet Coke) due to reduced demand from the downstream construction industry. The international Pet Coke market observed an ample availability of the product, which contributed to the decline in prices.

In the United States, the price of Pet Coke experienced a notable drop of approximately 13% in May. This decline was primarily attributed to the decreased demand from the construction industry, which continues to face a highly competitive and constrained labour market. Recent data from the most recent Jobs report indicated an addition of 25,000 construction jobs in May. Additionally, according to the Bureau of Labor Statistics (BLS), there has been a net increase of 192,000 construction jobs since the previous year. However, despite these gains, there remains a significant shortage of 400,000 workers, as estimated by the National Association of Home Builders (NAHB). This scarcity of labour has resulted in construction delays and the escalation of costs in homebuilding projects, as evidenced by data from the BLS.

Similarly, in Europe, the price of Pet Coke witnessed a decline of approximately 4% during the same period. This decrease can be attributed to the declined global market price of the product. Furthermore, the demand for Pet Coke from the downstream construction industry remained low as the construction sector faced multiple challenges impacting its operations and costs. These challenges included a shortage of skilled labour, a growing skills gap, and fierce competition to attract qualified talent. To meet its future needs, the sector was estimated to require an additional 225,000 workers by 2027. Moreover, significant reforms and regulations, including building safety reforms and changes to planning laws, affected the sector, further contributing to the ongoing challenges and changes within the construction industry during that period.

In Asia, specifically in India, the price of Pet Coke decreased by approximately 1.7%. This decrease was primarily influenced by stable demand for the product amidst high supply in both the domestic and international markets. Recently, the Indian government granted permission to import Pet Coke, specifically Needle Pet Coke (NPC), as a raw material for the production of lithium-ion batteries. NPC is used to produce graphite anode material required in the manufacturing of Lithium-Ion batteries. The imported NPC is strictly designated for this purpose and has a sulphur content of less than 0.8% to comply with environmental standards. India, being the largest consumer of Pet Coke globally, imports more than half of its annual consumption, mainly from the United States. The government's decision to allow the import of NPC aims to support the growth of the battery industry, which plays a crucial role in the renewable energy and electric vehicle sectors. This decision may have an impact on the price of Pet Coke in the global market as well as in the Indian domestic market.

According to ChemAnalyst, the price of Pet Coke is expected to remain stable in the first half of June 2023. This projection is based on the anticipation of slight improvement in demand from the downstream construction industry during this period. The balance between demand and supply is expected to narrow down, which may contribute to the stability of prices in the global Pet Coke market.