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Fuel status and outlook:
fuel grade petcoke trends and
opportunities in the Americas
February 06, 2020
Client Confidential Information
2
Agenda
▪ Introduction
– About the presenters
– About the CW Group
▪ Fuel status and outlook highlights
– Crude oil prices
– Petcoke market
– Coal market
▪ Final remarks
Client Confidential Information
Presenters
3
▪ Responsible for providing qualitative and quantitative analysis for
CW Research. Manages BD for research and consulting projects
in Middle East, Asia, and Africa.
▪ Bachelor’s Degree in International Business and Economics from
Saint Peter’s University, New Jersey, US and a Master of Science
degree in International Business from Seton Hall University, New
Jersey, USA
Carolina PereiraManager Research &
M:+351 917 314 391
▪ Responsible for the qualitative and quantitative analysis for CW
Research's price and volume assessments in the building
material and heavy industrial sectors. Leads the Porto office
▪ Degree in Management from Coimbra Business School, Portugal
Juliana VieiraBusiness Analyst
M:+351 918 285 753
▪ Executes quantitative analysis for CW Research's price and
volume assessments in the building material and heavy industrial
sectors. Experience in Cement industry.
▪ Degree in International Relations from ESPM, Rio de Janeiro,
Brazil
Prashant SinghAssociate Director
M:+91 887 960 7047
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4
About the CW Group
CEMENT, BUILDING
MATERIALS &
CONSTRUCTION
STEEL, METALS &
MINING
CHEMICALS DRY BULK CARGO,
PORTS AND
INFRASTRUCTURE
POWER, ENERGY
AND SOLID FUELS
Seasoned expertsBusiness &
technicalNetwork & access Proprietary data
STRATEGY AND M&A
ADVISORYBUSINESS DECISION
SUPPORTMEDIA & MEETINGS
Strategic advisory
Management consulting
M&A advice
Transaction support
Due diligence
Syndicated market /
industry study reports
Reference forecasts
Data and chart-books
Commodity price
assessments
Market reporting services
Newsletters
Online data access
Publications
Meetings
Advisory Research Media
Client Confidential Information
CW studies on coal and petcoke
5
For more details visit:
https://www.cwgrp.com/research/research-
products/product/295-world-coal-combustion-byproducts-
2020-fly-ash,-bottom-ash-and-syhthetic-gypsum-usage-and-
forecast-report-forecast-through-2024
For more details visit:
https://www.cwgrp.com/research/research-
products/product/296-world-green-petcoke-market-demand-
forecast-%E2%80%93-2025
World coal combustion byproductsWorld green petcoke market demand
forecast
6
Highlights: Fuel status and
outlook
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Globally, coal remains a significant energy source for the cement
industry followed by rising consumption from petcoke
7
Petcoke
Coal
Crude oil
Others
Global cement energy use in 2020E (%)
Source: CW Research, Global cement and concrete association, EIA
US cement energy use in 2020E (%)
*
* Others includes Diesel oil, natural gas and lignite
Petcoke
Coal
Crude oil
Others*
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0
20
40
60
80
100
Cushing, OK WTI Spot Price FOB Europe Brent Spot Price FOB
Crude futures are expected to remain stable in 2020 at similar
levels witnessed in 2019 of an average of USD 56 per barrel
8Source: CME Energy Group / As of January 14, 2020
Crude Spot FOB Price (Dollars per Barrel)*
CAGR 2015-2020
Cushing WTI : 4.0%
Europe Brent : 4.8%
Gold Sachs – USD 63
EIA / S&P– USD 64-65
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Crude oil refining demand is looking to grow in the Americas in
2020 and 2021
9
US & Canada
Asia Ex-
China
Europe
China
Middle East
Latin America
Others
2019E
Global crude oil capacity (mb/d, 2019E)
US & Canada
Asia Ex-
China
Europe
China
Middle East
Latin America
Others
2024F
Global crude oil capacity (mb/d, 2024F)
+6.4%
+1.4%
Source: OPEC
10
Coal markets
Client Confidential Information
5,6105,437
5,645
2014 2019E 2024F
World coal markets are big, still fueling large parts of the world
11
Global thermal coal consumption (Mtce1)
Source: IEA
1Megatonne of coal equivalent
Client Confidential Information
Indonesia is expected to remain the biggest coal exporter market
of thermal coal until 2024
12
0
100
200
300
400
500
2014 2015 2016 2017 2018 2019E 2020F 2021F 2022F 2023F 2024F
Indonesia Australia Russia Colombia South Africa United States
Main thermal coal exporting markets (million tons)
Source: EIA
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Even though US thermal coal export prices marginally increased
in 2019, this trend is expected to continue in 2020
13
US thermal coal exports prices (USD/tons)
2015 2016 2017 2018 2019E 2020F 2021F 2022F 2023F 2024F
Source: EIA
63.5
14
Petcoke market
Client Confidential Information
What is petcoke and its relevance for cement?
▪ Petcoke: A solid, carbonaceous residue produced by thermal decomposition of heavy
petroleum fractions or cracked stocks, or both (ASTM 2005)
▪ Petcoke varieties relevant for cement include:– Green delayed pet coke, which is produced by a semi-continuous batch process and accounts for majority of
pet coke production globally.
– Fluid pet coke, produce via the continuous fluidized bed process.
▪ So why petcoke?– High calorific value >8,000 kcal/kg (3,500-4,500 kcal/kg Conventional),
– low ash content and low volatile matter content
– But higher sulphur content (up to 9.2 percent, usually 8.5%)
▪ Types of petcoke: fuel grade, anode grade and needle coke
▪ Specifications:
15
Source: CW Research
Category Fuel Grade Anode Grade Needle Coke
Sulphur, wt% 4.0-7.0 1.0-3.0 0.1-0.8
Nickel/Vanadium, ppmw 200-3.000 50-200 <50
Calcium/ Sodium, ppmw 500-300 20-100 <50
Volatile Hydrocarbos,
wt%9-14 7-9 5-7
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16
The cement sector is only one of the major end-users consuming
petcoke, but dominates fuel grade
16
Source: CW Research
Calcination Cement Power Iron & Steel OthersFuel grade petcoke Calcined petcoke
0%
50%
100%
Aluminium Others
0%
50%
100%
Cement Others0-4% sulfur 5-5.5% sulfur 5.5-8% sulfur
World petcoke production (2019E) Market Segmentation (2019E)
Calcined petcoke
end-users (2019E)
Fuel grade petcoke
end-users (2019E) Grade-wise segmentation (2019E)
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33.1
US
2.7
5.9
2.3
4.22.6
3.3China
Mexico
Brazil
Turkey Japan
India
Indian petcoke demand on the rise, Chinese demand fading….
17Source: CW Research, TradeMap
Import region
Import/export region
Export region
US petcoke exports (2019E, million tons)
Client Confidential Information
Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20
Pet Coke Prices
CAGR:
1%
US petcoke prices are expected to rebound in 2020 supported by
imports from India
18
US petcoke export prices (USD/ ton)
Source: CW Research
Client Confidential Information
Final remarks
▪ Petcoke demand is affected primarily by coal demand not crude prices; hence demand for imported coal in China and India will remain a major factor for consideration
▪ Increasing domestic coal production by coal India is starting to weigh on imports; with a target of 1 billion tons per year by 2023, this could decrease coal imports
▪ Both of these factors will weigh on petcoke prices going forward
▪ With regards to petcoke price outlook, experts diverge on estimates. Goldman Sachs expects prices to increase to mid 60's from current levels while EIA and S&P expect only slight growth
19
Source: CW Research
About CW ResearchCW Research is a leader in syndicated and data-driven market research solutions. The company offers independent
perspectives on multiple industrial market segments(e.g., cement, metals & minerals, and specialty chemicals) and
deep functional expertise in market intelligence, sourcing intelligence, commodity pricing intelligence.
CW Research also provides custom industry and competitive research programs for operating companies, financial
analysts, consultants, governments, suppliers and many others as well as tailored studies together with CW Advisory.
For more information: research.cwgrp.com.
About CW AdvisoryCW Advisory is a global consultancy specializing in M&A and transaction advisory, strategic advisory, management and
operations consulting. Our deep sector expertise covers industrial, cyclical, utility and infrastructure.
CW Advisory works with boards and senior management addressing the most complex issues, including those in
functional areas spanning the value chain, including fuels & energy, logistics, organizational, operational due diligence,
feasibility assessments, among others.
CW Advisory is part of the CW Group, a leading advisory, research and media boutique aligned along three pillars:
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