Reasons behind the change of petroleum coke index

Since this year, China refining petroleum coke index has changed greatly, especially since the second quarter, the indexes of local refined petroleum coke have obviously tended to high sulfur and high trace elements, and petroleum coke with sulfur content of more than 3.0% has become the main production index of local refined petroleum coke, and petroleum coke, which contains about 1000ppm of vanadium, is also widely available. Our graphite electrode is made of high-quality 1# A-grade petroleum coke produced by PetroChina Daqing Refining and Chemical Co., Ltd. and Fushun refining and Chemical Co., Ltd., which meets the requirements of electric arc furnace steelmaking.

Data show that in January this year, the local refineries' output of 2A petroleum coke, 2B petroleum coke and 3A petroleum coke accounted for 3%, 8% and 14% respectively. The output of petroleum coke with sulfur content less than 2.0% accounted for 25% of the total local refining output. The output of petroleum coke with sulfur content between 2.0-3.0% accounted for 35% of the total local refining output. The output of petroleum coke with sulfur content more than 3.0% accounted for 38% of the total local refining output. In addition, the output of pellet coke accounted for 1% of the total local refining output.

However, in June, the indexes of local refined petroleum coke had deteriorated significantly, among which, the production of petroleum coke with sulfur content less than 2.0% accounted for 13% of the total local refining production, which was 12 percentage points lower than that in January. The output of petroleum coke with sulfur content between 2.0-3.0% accounted for 24% of the total local refining output, which is 11 percentage points lower than that in January. The output of petroleum coke with sulfur content of more than 3.0% accounted for 57% of the total local refining output, an increase of 19 percentage points over January. In addition, the output of pellet coke accounted for 4% of the total local refining output, which is 3 percentage points lower than that in January.

It can be obviously seen that since the first half of the year, the output of medium and low sulfur petroleum coke has decreased significantly, and the output of high sulfur petroleum coke and pellet coke has increased significantly. However, as a by-product of refining and chemical enterprises, the change of petroleum coke index originates from the change of refinery crude oil.

Affected by the sanctions imposed by the European Union on Russia, the distribution structure of China's crude oil sources began to change from the second quarter. Since May, Russia has become the largest source of crude oil imported by China.

According to customs data, China's crude oil imports in June 2022 were 36.3402 million tons, a decrease of 10.0054 million tons from the previous month, a month-on-month decrease of 21.83% and a year-on-year decrease of 19.2%. In June, Russia imported 7.2859 million tons of crude oil, accounting for 20.34% of the total, up 9.43% year-on-year. Affected by the Russia-Ukraine situation, European sanctions against Russia have been escalating, the price preferential policies for China's crude oil imports from Russia are considerable. Britain, the United States and other Middle East countries have significantly reduced their crude oil exports to China, while Russia has increased its crude oil exports to China.

Since the Russia-Ukraine war, the international crude oil price has remained high, once maintained at the price of more than $100/barrel, but the domestic demand for diesel and gasoline is not strong, refineries are under huge cost pressure, and there are also many refineries in a state of loss. Therefore, crude oil with higher cost performance has become the first choice for local refining. Therefore, the distribution structure of China's imported crude oil sources has changed greatly, which has led to the deterioration of petroleum coke indexes.

At present, local refining petroleum coke tends to be high sulfur and high precision micro situation is expected to be difficult to reverse temporarily, therefore, for petroleum coke downstream industry, especially aluminum carbon, the situation of increasingly difficult raw material procurement will be difficult to be improved in the short term. For technical guidance of carbon market, please consult us for details.