【Petroleum Coke】Coking Commodity Prices Declined in Early May, Delayed Coking Theoretical Profit ...

Calcined petroleum coke, with its high carbon content, low sulfur, and low impurities, plays a vital role in modern manufacturing, especially in the aluminum and steel industries.

【Petroleum Coke】Coking Commodity Prices Declined in Early May, Delayed Coking Theoretical Profit Expected to Fall

The temporary ceasefire between the United States and Iran in April suppressed the sharp upward momentum of international crude oil prices to a certain extent, but market concerns over high oil prices have not eased. Domestic refined oil product supply remained relatively sufficient, while downstream demand recovery fell short of expectations. After entering May, both gasoline and diesel prices declined. Raw material residue oil prices remained relatively stable, while petroleum coke prices were dragged down by market sentiment, leading to a decline in the average price. As of May 6, the average price of high-sulfur petroleum coke in Shandong was 1,896 RMB/ton, down 58 RMB/ton compared with the end of April, representing a decline of 2.97%.

I. Delayed Coking Theoretical Profit Declined in April, Down 4.42% Month-on-Month

In April, the average delayed coking profit in Shandong was 389 RMB/ton, down 18 RMB/ton month-on-month, a decrease of 4.42%. The average monthly comprehensive revenue of delayed coking products was 4,604 RMB/ton, up 136 RMB/ton month-on-month, an increase of 3.04%.

On the raw material side, the average coking cost during the period was 4,065 RMB/ton, up 154 RMB/ton month-on-month, an increase of 3.94%; and up 443 RMB/ton year-on-year, an increase of 12.23%. During the month, coking costs increased significantly, and the increase in coking costs exceeded the increase in coking commodity prices, resulting in a slight decline in profit.

Overall, the fluctuations in delayed coking unit costs and profits during the month were jointly affected by upstream raw material prices and coking commodity prices. Profit showed a weekly downward trend. As the international situation stabilized toward the end of the month, price fluctuations became smaller, therefore the monthly average profit did not change significantly compared with March.

II. Coking Commodity Prices Mainly Declined at the Beginning of May, Down 35.34% Compared with the End of April

As of May 6, delayed coking profit in Shandong was 30 RMB/ton, down 56 RMB/ton compared with the end of April, representing a decline of 65.12%.

Overall, prices of most coking products declined. Coking gasoline and diesel prices both fell, while petroleum coke prices also declined simultaneously. Since these products account for a relatively large proportion in the calculation, overall coking commodity prices decreased.

As of May 6, the theoretical petroleum coke cost price was 4,159 RMB/ton, stable compared with the end of April, while coking commodity prices were 4,339 RMB/ton, down 57 RMB/ton from the end of April, representing a decrease of 1.3%. Overall, costs remained stable while coking commodity prices declined, resulting in reduced profits.

III. Average Delayed Coking Theoretical Profit Expected to Decline in May, with a Month-on-Month Drop of 61.44%

In terms of crude oil, market attention remains focused on U.S.-Iran negotiations and the navigation status of the Strait of Hormuz. Regarding gasoline and diesel prices, most refineries maintained stable operating rates during the month, while inventories at most refineries remained at relatively high levels, providing no positive support for gasoline and diesel prices. The replenishment enthusiasm of midstream and downstream buyers has weakened, and post-holiday demand is expected to decline rapidly.

Diesel demand has also been affected by the rainy season in southern China, restricting industrial, mining, and infrastructure operations. Weak rigid demand lacks momentum to support price increases. Overall, gasoline and diesel prices at independent refineries in Shandong are expected to continue trending downward weakly. Under the combined influence of market sentiment and supply-demand fundamentals, residue oil prices are also expected to decline simultaneously.

Looking at May, high-sulfur petroleum coke prices in Shandong are expected to continue downward adjustments. The average delayed coking theoretical blended cost is expected to remain around 3,900-4,000 RMB/ton, lower than April costs. However, due to fluctuating downward adjustments in coking commodity prices, delayed coking theoretical profits are expected to decrease further, with the May average expected to range between 50-150 RMB/ton.

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