Petroleum Coke Demand Grows Steadily

By Zhang Jiaze    

Basic supply/demand balance in the world

The output of petroleum coke in the world increased from 83
million tons in 2001 to 88 million tons in 2004 with an average
annual growth of 2%. The United States is the major petroleum
coke producer and the output accounts for 60% of the world total.
   The consumption of petroleum coke in the world increases with
the production and consumption growth of crude oil. The supply
and the demand of petroleum coke in the world were basically
balanced in 2004 and the consumption was 88 million tons. The
proportion of high-sulfur crude oil is relatively high in the
international market. High-sulfur petroleum coke is usually
used as fuel for stand-by power stations and the balance is
exported to developing countries with lower requirements on
environmental protection. Medium and low-sulfur petroleum coke
is mainly used in steel smelting and aluminum smelting sectors.
Sixty percent of the total petroleum coke output in the world
was used as fuel and the balance was used in the steel smelting
and aluminum smelting sectors in 2004.
   It is expected that the demand of petroleum coke in the world
will increase at an average annual rate of 2.5% during 2004-2010
and reach 100 million tons in 2010.

Rapid output increase in China

The output of petroleum coke in China has increased constantly
in recent years with an average annual growth of 10% during
2000-2005. The output of petroleum coke was 9.80 million tons
in 2005. It was mainly medium and low-sulfur petroleum coke and
the output of high-sulfur petroleum coke was 1.81 million tons,
only accounting for 18% of the total. China has more than 30
petroleum coke producers today. Most of them are companies
subordinate to CNPC and Sinopec Group.
   The output of high-sulfur petroleum coke in China has
increased rapidly in recent years, but the growth of the market
demand is slow. The import amount of petroleum coke has therefore
reduced constantly. The import amount of petroleum coke in China
was 633 thousand tons in 2005, a drop of 24.1% from 2004. The
import amount of high-sulfur petroleum coke was 525 thousand
tons, accounting for 82.9% of the total. High-sulfur petroleum
coke was mainly from the United States, Taiwan province, Korea
and Malaysia. Low-sulfur petroleum coke was mainly from
Indonesia.
   The consumption of petroleum coke in China has presented a
trend of overall increase in recent years. The export amount is
influenced by the output. In case the operating rate is normal,
the export amount of petroleum coke in China is more than 1.0
million tons a year. The export amount was 2.052 million tons
in 2005. The amount of low-sulfur petroleum coke exported by
China to Bahrain, India, Japan, Russia and the United States
accounted for 91% of the total export amount of low-sulfur
petroleum coke. The amount of high-sulfur petroleum coke
exported to Bahrain, India, Japan, Korea and the United States
accounted for 99% of the total export amount of high-sulfur
petroleum coke.

Demand growth promoted by downstream sectors

With the development of iron/steel, electrolytic aluminum and
cement sectors, the consumption of petroleum coke in China has
increased rapidly. The apparent consumption of petroleum coke
in China was 4.712 million tons in 2000 and increased to 8.381
million tons in 2005 with an average annual growth of 12%. The
crude oil processing amount in China was 286 million tons in 2005
and is expected to reach 370 million tons in 2010. The output
of petroleum coke will reach 13 million tons in 2010. The demand
of petroleum coke in China will further increase with the
development of downstream sectors.
     1. Aluminum sector: The output of aluminum oxide was 8.61
million tons in 2005, an increase of 23.2% over 2004 and the
output of electrolytic aluminum was 7.41 million tons, an
increase of 18.7%. With the rapid development of the
electrolytic aluminum sector, the pre-baked anode production
has become a new investment focus. Some large electrolytic
aluminum mills have also made investments in the construction
of carbon plants. Because of these capacity expansions, the
output of pre-baked anodes in China has increased drastically.
The consumption of petroleum coke in pre-baked anodes was 5.0
million tons in 2005, accounting for 60% of the total.
   It is expected that the output of electrolytic aluminum in
China will increase at an average annual rate of 6% during
2005-2010 and reach around 10.0 million tons in 2010. The
consumption of petroleum coke in the aluminum sector will be 6.5
million tons at that time.
     2. Iron/steel sector: The output of steel in China was 350
million tons in 2005, an increase of 25% over 2004. The rapid
development of the iron/steel sector has directly promoted the
development of the carbon sector. The output of carbon products
in China was 800 thousand tons in 2005 and 1.2 million tons of
petroleum coke was consumed, accounting for 14% of the total.
It is expected that the output of steel in China will increase
at an average annual rate of 8% during 2005-2010 and reach 500
million tons in 2010. The demand of carbon products will be
around 1.1 million tons and the consumption of petroleum coke
in the iron/steel sector will be 1.7 million tons at that time.
     3. Industrial silicon sector: In the industrial silicon
production, petroleum coke is used as reducing agent and carbon
electrode. The total capacity of industrial silicon in China is
more than 1.0 million t/a today. China has already become a major
industrial silicon producer and exporter in the world. There are
more than 200 industrial silicon producers. The output of
industrial silicon in China was 900 thousand tons in 2005,
consuming 600 thousand tons of petroleum coke. It is expected
that the output of industrial silicon in China will reach more
than 1.0 million tons in 2010 and the consumption of petroleum
coke will be 800 thousand tons at that time.
     4. Fuel: High-sulfur petroleum coke can be used as fuel for
both conventional boilers and circulation fluidized-bed boilers
(CFB).
   CFB is a high-effect, clean and environmental friendly
power-generation technology universally recognized in the world.
CFB boilers mainly use coal as fuel today and the consumption
proportion of high-sulfur petroleum coke is only around 2%. The
consumption of high-sulfur petroleum coke as fuel in China was
around 1.2 million tons in 2005, accounting for 14% of the total.
   The proportion of high-sulfur petroleum coke in the CFB fuel
will increase in future. It is expected that the consumption of
high-sulfur petroleum coke as fuel will be around 2.5 million
tons in 2010.
     5. Others: Carbon monoxide and hydrogen can be generated
through the gasification of petroleum coke. The petroleum coke
gasification technology is developed on the basis of the coal
gasification technology. The gasification technology developed
by Texaco of the United States using coke as feedstock already
has a history of nearly 20 years. Feedstock for commercial coke
gasification units has extensive sources. Besides petroleum
coke, organic refuses such as waste oil and scrap plastics can
also be used.
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