Energy and commodity price benchmarking and market insights

Transcription

1 Energy and commodity price benchmarking and market insights London, Houston, Washington, New York, Portland, Calgary, Santiago, Bogota, Rio de Janeiro, Singapore, Beijing, Tokyo, Sydney, Dubai, Moscow, Astana, Kiev, Porto and Johannesburg

2 US Midcontinent petroleum coke: New supply, growing market Washington, DC Ross Allen 25 July 2012

3 Agenda for today: Petroleum coke market update a broad view: US Gulf coast, US west coast market update Freight market activity Coal and coke comparisons Midcontinent coke a close up: Midcontinent freight: Barge rates indexed Midcontinent freight: Rail rates indexed Market fundamentals Expectations for Midcontinent coke and conclusions Who we are: Argus in petroleum coke, coal and freight

4 Petroleum coke market update

5 US seaborne coke: USGC USGC petroleum coke has bounced back from end USGC petroleum coke $/mt Now in mid-$60s for highsulphur, mid-$70s for midsulphur products Jun Aug Oct Dec Feb Apr Jun 4.5pc 6.5pc Fob US Gulf Coast: June $/mt 40 HGI 70 HGI Low High Mid Low High Mid 4.5pc Sulphur pc Sulphur Copyright 2012 Argus Media Ltd. All rights reserved.

6 US seaborne coke: USWC USWC petroleum coke has bounced back from end USWC petroleum coke $/mt 60 Now in high-$80s for midsulphur, mid-$90s for high- 30 sulphur products 0 Jun Aug Oct Dec Feb Apr Jun 3.0pc 4.5pc Fob US West Coast $/mt 45 HGI Low High Midpoint 3.0pc Sulphur pc Sulphur Copyright 2012 Argus Media Ltd. All rights reserved.

7 USGC into NW Europe: Competing fuels cif ARA Coal has kept coke underpinned, with the dip in late-2011 more extreme when compared with coal Petroleum coke advantaged to coal when coke Btu values drop below 70-80pc of coal Cif ARA coke & coal $/Btu pc of coal ` Jun Aug Oct Dec Feb Apr Jun 4.5pc 6.5pc Copyright 2012 Argus Media Ltd. All rights reserved.

8 USGC into Europe: Western Mediterranean Again, coal keeps delivered coke underpinned, with per- Btu costs less than half coal in late 2011 That has bounced back to more normal levels in 2012, with coke and coal nearer historic levels Western Med coke & coal $/Btu pc of coal Jun Aug Oct Dec Feb Apr Jun 4.5pc 6.5pc Copyright 2012 Argus Media Ltd. All rights reserved.

9 Coke and coal into Europe: Freight Freight has slipped, which benefits USGC coke proportionally more than coal USGC freight is down 20pc, the RBCT route is off 28pc on a tonnage basis But on a heat-content basis, the premium for the longer USGC route dropped to 5.2pc from 5.9pc June a year ago Panamax freight $/mt Jun Aug Oct Dec Feb Apr Jun Richards Bay Coal USGC Coke Copyright 2012 Argus Media Ltd. All rights reserved.

10 Midcontinent petroleum coke: Close up

11 Barge rates help Midcontinent coke move Coke and coal are analogous for barge rates Davant export point is in Plaquemines parish, south of New Orleans Representative rates for area terminals including: o IMT o United Bulk Terminal Dry-bulk barge freight July 2007= Davant bound barge coal rates from: $/mt Big Sandy Louisville Port Amherst St. Louis Jul Jul Copyright 2012 Argus Media Ltd. All rights reserved.

12 Rail rates generally higher than barge Coke and coal are analogous for rail rates to a degree Unit train freight more typical for coal than coke Eastern rail rates have been more stable than barge, but climbed 11pc during period o Indexed values: July 2007 is 100 o Indexed to average of key eastern rail rates Coal rail freight July 2007= Indexed routes include: Central Appalachia: Carolinas Florida Northern Appalachia: Florida Illinois Basin: SW Ohio New York Florida New York Southern USEC Terminals Local routes Southern USEC Terminals TVA Copyright 2012 Argus Media Ltd. All rights reserved.

13 Key Midcontinent infrastructure: USGC terminals Coal has been competing with coke on the US Gulf But terminal operators see coke as a stable, bread and butter market Heavy investment in regional infrastructure includes: Trafigura - Burnside Foresight - IC Rail Marine Armstrong RAM Terminals Oiltanking United Bulk

14 Key refining infrastructure: US Midcontinent

15 US Midcontinent refining capacity Location Type Tonnage Phillips 66 Wood River, IL 6pc sulphur, HGI 1,800,000st/yr Flint Hills Pine Bend, MN 6pc sulphur, 40 HGI 1,300,000st/yr ExxonMobil Joliet, IL 5.7pc sulphur, 45HGI 1,250,000st/yr Citgo Lemont, IL 5pc sulphur, 50HGI 850,000st/yr BP Toledo, OH 6pc sulphur, +100,000st of 2.2pc sulphur 550,000st/yr CVR Coffeyville, KS 3pc max sulphur, 80 HGI 500,000st/yr Marathon Robinson, IL 4.4pc sulphur, 65 HGI 450,000st/yr Holly Frontier El Dorado, KS 5pc sulphur, 40HGI 329,000st/yr NCRA/CHS McPherson, KS sulphur/hgi unknown 280,000st/yr Husky Lima, OH 6.5pc sulphur, 30-35HGI 240,000st/yr Copyright 2012 Argus Media Ltd. All rights reserved.

16 US Midcontinent specification: Chicago-area Sulphur content is relatively high: 6pc matches typical regional supply HGI is 40 minimum, capturing a majority of the region s sup ply Prices reflect significant discount to USGC coke and longer export logistics chain

17 Argus in petroleum coke & coal

18 London Houston Washington New York Portland Calgary Santiago Bogota Rio de Janeiro Singapore Beijing Tokyo Sydney Dubai Moscow Astana Kiev Porto Johannesburg Copyright 2012 Argus Media Ltd. All rights reserved.

19 Coke & coal intelligence: Market data include: Coke prices Freight & transport Competing fuels Cement, power, steel Robust, public coke methodology Ethics policy Compliance rules

20 Coal market indexation: API indexes: Published with IHS McCloskey API 2 NW Europe (cif ARA) API 4 South Africa (fob RBCT) API 5 Australia (5,500 kcal) API 6 Australia (6,000 kcal) - fob Newcastle API 8 cfr South China (5,500) API C1 Australia coking coal

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22 Questions & Answers

23 Ross Allen Generation Fuels Phone: +1 (202) Washington, DC Copyright notice Copyright 2012 Argus Media Ltd. All rights reserved. All intellectual property rights in this presentation and the information herein are the exclusive property of Argus and and/or its licensors and may only be used under licence from Argus. Without limiting the foregoing, by reading this presentation you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of Argus. Trademark notice ARGUS, ARGUS MEDIA, the ARGUS logo, FMB, ARGUS publication titles and ARGUS index names are trademarks of Argus Media Ltd. Visit for more information. Disclaimer All data and other information presented (the Data ) are provided on an as is basis. Argus makes no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the Data or fitness for any particular purpose. Argus shall not be liable for any loss or damage arising from any party s reliance on the Data and disclaims any and all liability related to or arising out of use of the Data to the full extent permissible by law.