In the third quarter of 2023, the North American Petroleum Coke (Pet Coke) market, particularly in the United States, encountered a challenging period characterized by a 2.7% decline in the value of Pet Coke. This downturn was driven by a combination of factors that pushed the market into a bearish trend. Notably, the construction industry, a major consumer of Pet Coke, experienced sluggish demand, while the supply of Pet Coke remained relatively high, escalating pricing pressures. The Panama Canal drought situation added uncertainty and disrupted export demand, leading to the accumulation of inventories at ports. To address the growing inventory issue, traders adjusted their pricing strategies and offered Pet Coke at more competitive rates. Furthermore, an ongoing labor shortage in the USA significantly impacted the construction industry’s demand. The US Chamber of Commerce reported a national worker shortage, resulting in more job openings than pre-pandemic levels, while labor force participation rates remained below their pre-pandemic levels. This labor challenge further contributed to subdued demand from the construction sector, making the third quarter a challenging period for the North American Pet Coke market.
During the third quarter of 2023, the Asian Petroleum Coke (Pet Coke) market, particularly in China, demonstrated dynamic performance. In the initial two months, the price of Pet Coke surged by 3.5%, primarily influenced by fluctuations in the global Crude Oil market. Concurrently, OPEC+ further reduced oil production due to supply concerns, surpassing expectations. Finished oil storage in the United States decreased, and port Pet Coke storage dwindled, while refining Pet Coke inventory remained low. Domestic port Pet Coke inventory continuously declined, boosting demand. Imports of Pet Coke at ports decreased, and import traders were eager to ship goods. Port shipments remained swift, aiding in depleting Pet Coke stocks. Refined Pet Coke shipments were strong, and refinery inventory stayed low, with a focus on fulfilling early orders. Downstream demand remained robust, driving up refined Pet Coke prices. Some downstream entities adopted a cautious stance with elevated prices, leading to increased wait-and-see sentiment. The third quarter brought about a complex and fluctuating scenario in the Asian Pet Coke market, with various factors influencing the supply and demand dynamics.
In the third quarter of 2023, the Eurozone Pet Coke market experienced notable price fluctuations. Pet Coke prices steadily increased in the last two months of the quarter, with Germany being particularly affected, registering price hikes of 0.5% and 1%. The primary driver of these increases was the expensive import of Pet Coke from overseas markets. Furthermore, the surge in feedstock crude oil prices on the international stage added significant pressure, driven by reports from OPEC and the U.S. EIA projecting continued high demand and price escalation in the oil industry throughout the year. Consequently, production costs rose, impacting the overall Pet Coke price. While the downstream construction industry displayed moderate interest in Pet Coke, tight supply and low availability contributed to a sense of scarcity in the market dynamics. In the first month of the quarter, prices briefly declined by approximately 1.5% due to ample domestic supply and subdued demand. Macroeconomic challenges, including high inflation affecting consumer spending, further compounded the bearish sentiment, causing suppliers to offer their Pet Coke stocks at attractive prices.
During the past quarter, the South American Pet Coke market witnessed a notable bearish trend. This trend was primarily driven by an increase in the product’s price in the USA, a major supplier to Brazil, which heavily relies on imports. The Brazilian construction sector, a significant consumer of Pet Coke, maintained steady demand while supply remained moderate. In the USA, Pet Coke prices surged due to a significant rise in the cost of its primary raw material, Crude Oil. This surge had a cascading effect on Pet Coke prices throughout the country. Concurrently, the construction industry in the USA exhibited signs of growth, aligning with the overall increase in economic activity. This increased demand added to the upward pressure on Pet Coke prices. Additionally, the U.S. Energy Information Administration (EIA) reported a substantial reduction of 10.6 million barrels in commercial crude oil inventories, excluding the Strategic Petroleum Reserve (SPR). This report contributed to the prevailing market dynamics. Overall, the quarter was marked by price fluctuations influenced by supply, demand, and Crude Oil prices in both the South American and US markets.
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