Analysis of China's Petroleum Coke Market     

Petroleum coke, also known as crude coke, is generated by the delayed coking process from heavy oil or oil residues left from the distillation of crude oil. Petroleum coke is formed as a by-product when base oil is pyrolyzed in delayed coking units at high temperature to produce light oil. According to sulfur content, volatile content and ash content, petroleum coke is divided into three grades: 1#, 2# and 3#. Each grade is divided into two types, A and B, according to its quality. In addition, petroleum coke containing more than 3.0% of sulfur is known as high-sulfur petroleum coke. The 1# petroleum coke is used to produce regular power graphite electrodes used in the steel industry and is also used as carbon to reduce alumina in the aluminum industry. The 2# petroleum coke is used to produce electrode pastes and operation electrodes used in the electrolytic cells (furnaces) of the aluminum industry. The 3# petroleum coke is used to produce silicon carbide (abrasive material), calcium carbide and other carbon-based products and is also used for the production of anode bases for electrolytic cells in the aluminum industry and the bricks for the lining and base of blast furnaces. High-sulfur Petroleum coke is mainly used as fuel.

1. The development situation of China's petroleum coke industry

(1)  Production

In 2009, China's delayed coking units have a total capacity of approximately 93 million t/a, they together produced about 16.9 million tons of petroleum coke. Sinopec Group continued to rank first in the output. China National Petroleum Corporation (CNPC) and China National Offshore Oil Corporation (CNOOC) have a reputation as leaders in the quality of petroleum coke. In 2009, the growth of the coking capacity of both Sinopec Group and CNPC slowed down significantly compared to previous years, but CNOOC actively expanded its capacity by acquiring local refineries.
   Sinopec Group has 24 subsidiary refineries to produce petroleum coke. They are distributed in northern China, eastern China, southern China, the Yangtze River valley and northwestern China and mainly produce 2# petroleum coke, 3# petroleum coke and high-sulfur petroleum coke. Its refineries located in northern region, the Yangtze River valley and Shandong province mainly produce 2# petroleum coke; and those in eastern, southern northwestern regions mainly process imported crude oil and produce 3# petroleum coke and high-sulfur petroleum coke. In 2009, Sinopec's output of petroleum coke was about 9.78 million tons, up 3.7% year on year, and the processing capacity of its coking units was 40.5 million t/a, up 7.2% year on year.

Sinopec's Delayed Coking Units in 2009
Refinery                                                                   Coking capacity      Output
   million t/a     thousand tons
Sinopec Jinling Petrochemical Company    3.4     870
Sinopec Zhenhai Refining & Chemical Company    2.5     732
Sinopec Yangzi Petrochemical Company    2.4     660
Sinopec Maoming Petrochemical Company    2.0     638
Sinopec Qilu Petrochemical Company      2.8     560
Sinopec Guangzhou Petrochemical Company    1.0     598
Sinopec Jingmen Petrochemical Company    1.4     347
Sinopec Anqing Petrochemical Company    1.5     361
Sinopec Tianjin Petrochemical Company    3.5     253
Sinopec Shanghai Petrochemical Company    1.0     491
Sinopec Changling Petrochemical Company    1.2     260
Sinopec Tahe Petrochemical Company      1.5     367
Sinopec Wuhan Petrochemical Company     3.4     326
Sinopec Jiujiang Petrochemical Company    1.0     298
Sinopec Shanghai Gaoqiao Petrochemical Company      3.0     726
Sinopec Shijiazhuang Refining & Chemical Company    0.8     229
Sinopec Beijing Yanshan Petrochemical Company       1.4     356
Sinopec Cangzhou Petrochemical Company    0.5     162
Fujian Petrochemical Company Ltd        0.6     112
Sinopec Jinan Petrochemical Company     1.2     125
Sinopec Shengli Viscose Oil Plant       0.4     70
Sinopec Qingdao Refining Corp Ltd       2.5     827
Sinopec Luoyang Petrochemical Company    1.4     389
Sinopec Hangzhou Oil Refinery              0.2     23
Total                                   40.5     9780
Source: CNCIC


   CNPC's subsidiary refineries are located in northeastern China and northwestern China. Six refineries of it in northeastern region mainly process crude oil from the Daqing Oilfield and produce 1# petroleum coke. In this region, CNPC Liaohe Petrochemical Company processes crude oil from the Liaohe Oilfield and produces 3# petroleum coke. Its refineries in northwestern region mainly produce 2# petroleum coke and 3# petroleum coke. In northern China CNPC Tianjin Dagang Petrochemical Company produces 1# petroleum coke. In 2009, the total petroleum coke output of CNPC was about 3.02 million tons, and the processing capacity of its coking units was 17.7 million t/a, basically flat with 2008. The new 1.2 million t/a coking unit of CNPC Dushanzi Petrochemical Company went into operation in 2009, but this company's old coking unit has ceased production permanently.

CNPC's Delayed Coking Units in 2009
Refinery                                                                      Coking capacity          Output
   million t/a     thousand tons
PetroChina Fushun Petrochemical Company     2.4     379
PetroChina Jinxi Petrochemical Company      1.8