Cement and Clinker Price

Markers: Med Basin, Persian

Gulf-Arabian Sea and East

Africa

World and India Petcoke Prices

Webinar presentation

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December 1, 2016

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Agenda

CW Group overview

Introduction to India petcoke price marker

Petcoke prices & market representation

– Domestic supply

– CFR pricing

– End-users snapshot

Final remarks

3

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Presenter

4

Prashant SinghAssociate Director

ps@cwgrp.com

M: +91-887-960-7047

Associate Director of CW Group,

Mumbai, India

MSIB from Seton Hall University, USA

Extensive experience in management

consulting and market research

Manages CW Advisory queries for the

India operations

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About the CW Group

CEMENT, BUILDING

MATERIALS &

CONSTRUCTION

STEEL, METALS &

MINING

CHEMICALS DRY BULK CARGO,

PORTS AND

INFRASTRUCTURE

POWER, ENERGY

AND SOLID FUELS

Seasoned expertsBusiness &

technicalNetwork & access Proprietary data

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SUPPORTMEDIA & MEETINGS

Strategic advisory

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Due diligence

Syndicated market /

industry study reports

Reference forecasts

Data and chart-books

Commodity price

assessments

Market reporting services

Newsletters

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Publications

Meetings

Advisory Research Media

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CW Mumbai office and Advisory Board Members

Mr. Jean Michel Allard is an independent expert in the cement industry. Mr. Allard gained extensive experience during his forty year tenure with Vicat Group,

an International Cement Organization.

He served as the Deputy CEO of the Vicat Group for twenty-two years and prior to that appointment, he held several managerial positions within the

company.

His ancillary assignments included membership on the Board of Directors of Syndicat Français Industrie Ciment (SFIC) and Chairman of the National

Commission on Safety for the French Cement Profession.

Mr. Jouni Salo is former Chief Executive Officer of KHD Humboldt Wedag International AG (KHD) and former President of the Construction Materials Division

at Metso Minerals Inc. As President of the Construction Materials Business Line, he was responsible for the profitability and reorganization of one of the

largest business divisions, with manufacturing plants in numerous parts of the world, with a strong focus on development of emerging markets. Previously, Mr.

Salo played a pivotal role with Metso in the acquisition and integration of companies around the world.

Mr. Salo is Finnish by birth and has more than 30 years of international business experience in the industrial equipment market. He served in a variety of

senior positions with Helsinki-based Metso Minerals Inc and related operations. He holds a Bachelor of Science degree in Mechanical Engineering from the

Polytechnic College in Hameenlinna, Finland.

Mr. Sumit Banerjee is former vice chairman of Reliance Cement and CEO of Reliance Infrastructure, and former CEO and Managing Director of ACC Limited,

Holcim Group. His career started at L&T in 1979 and during his role as Executive Assistant to a Profit Centre Head in L&T, he had early insights into

Management Control Systems. He also spent 17 years in the Aluminium Sector, with Indal/Hindalco.

Sumit Banerjee is a seasoned business leader with a strong background in manufacturing and infrastructure, a professional with a lengthy top-management

level exposure to core sector industries such as non-ferrous metals, steel processing, cement and infrastructure. Mr. Sumit Banerjee is a Fellow of the

Institute of Engineers, the Founding Chairperson of CII’s Cement Division, a member on the Managing Committee of Bombay Chamber of Commerce &

Industry (BCCI) and a government nominee on the boards of IIM Lucknow and Construction Sector Skills Development Council.

He is a Mechanical Engineering graduate from IIT, Kharagpur and did his 5 month Management Education Programme at IIM Ahmedabad.

Sumit Banerjee

Advisory Board Member

Jean-Michel Allard

Advisory Board Member

Jouni Salo

Advisory Board Member

CW Group has expanded its international foothold by establishing an office in the world’s second largest cement

market

Led by Prashant Singh, Associate Director, the Mumbai CW Research team adds great value to CW’s efforts having

direct access to the Indian cement market, supporting the US and European teams

In the coming years, we look forward to expanding our presence to other global hotspots

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Recent Client Engagements

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Petcoke price assessment overview

8

ABOUT THE REPORT

• Bi-monthly price assessment and monthly price index for

fuel-grade petcoke delivered on 30-60 day forward

period on a CFR basis

• Tracks landed pricing at India West and East Coast ports

• Provides market-moving news, cutting-edge and jargon-

free insights and market commentaries

WHO IS THIS REPORT FOR?

• Petcoke users / buyers

• Petcoke marketers

• Oil refiners

• Solid fuel traders

• Logistics specialists

RELEASE DETAILS

• Publications in PDF via email

• Flash updates: bi-monthly price assessment

• Monthly assessments: extended market update

PRICING

Annual subscriptions:

• Individual: US$ 950

• Site license: US$ 2,850

• Corporate license: US$ 9,950

For more details, please visit

http://www.cwgrp.com/research/research-products/price-assessments/category/27-petcoke

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Methodology highlight: Market price index

Primary research

Engaging with traders and end-

users, as well as intermediaries and

other market participants

Petcoke pricing

Aggregating price points obtained

through primary research

Establishing price markers

India CFR petcoke pricing

methodology

• Coal to petcoke comparison (mmBTU basis)

• Latest developments in the petcoke market

• Key insights from producers, traders, end-users

• Domestic production: India and U.S.

• Industry news: coking, refineries, shipping

• Import volume and breakdown by end-user

• End-user snapshot: Cement market – volumes and

market developments

India (CFR) Petcoke Price Assessment also covers:

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Petcoke demand from India has almost doubled this year

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Import region

Import/export region

Export region

Source: CW Research

3.4 M MT (-

13.7%

Sep, 2016)

9.4 M MT

(+93.3%

Aug,

2016)

27.7 M MT

(+16.8%

Sep, 2016)

Global petcoke trade (Jan-Sep 2016)

0.4 M MT

(-21.6%

Jul,2016)

1.1 M MT

(-42.2%

Jul, 2016)

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Domestic demand for petcoke increasing; Cement industry remains

the main end-user

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Indian petcoke consumption (mta)

Source: CW Research, Ministry of Statistics

-1.8%

CAGR

23.7%

CAGR

6

12

18

70%

17%

13%

Cement Power Others*

Most Indian petcoke production consists of

fuel grade petcoke

Petcoke has become a preferential

alternative to coal, but is losing ground as

prices are increasing

Major cement players are currently looking at

adjusting fuel mix

Industry-wise petcoke consumption (%)

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India petcoke supply-side

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0.90 M MT

MRPL 0.50 M MT

CPCL

0.80 M MT

IOC

0.70 M MT

HPCL

1.30 M MT

IOC

0.50 M MT

NOCL

0.50 M MT

IOC

0.50 M MT

IOC

5.60 M MT

RIL

2.31 M MT

Essar

Refineries

Import ports

Source: CW Research Estimates

Domestic petcoke production (‘000 tons)

700

1,000

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CFR petcoke prices are on the rise, reaching peak levels

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India CFR West Coast (US$/ton) India CFR East Coast (US$/ton)

Long-term trend: India CFR West Coast (mid-sulfur petcoke) (US$/ton)

Source: CW Research

$75 $80 $85 $90 $95

Sep-16

Oct-16

Nov-16

<5%Sulfur >5% Sulfur

$75 $80 $85 $90 $95

Sep-16

Oct-16

Nov-16

<5%Sulfur >5% Sulfur

$100

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Petcoke discounts to coal have increased in the past two months

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Coal to petcoke comparison: India West Coast (US$/mmBTU)

Source: CW Researchh

Petcoke discounts to Richards Bay coal

(5,500 kcal/kg NAR): India West Coast (%)

$2.5

Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16

Richards Bay coal 5,500 kcal/kg NAR >5% petcoke <5% petcoke

82

%

61

%

60

%

54

%

46

%

38

%

86

%

67

%

66

%

59

%

50

%

42

%

90

%

84

% 93

%

85

%

73

%

64

%

94

%

90

%

10

1%

92

%

81

%

70

%

Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16

G8 grade domestic coal <5,200 kcal/kg Bhavnagar Lignite 4,500 kcal/kg NAR >5% petcoke <5% petcoke

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End-user focus: Cement industry

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India: Cement production (million tons) • India is seeing strong demand

levels so far this year.

• In 2016, demand for cement in

India was expected to see

strong growth on account of

infrastructure and housing

investments. However, the

demonetization on Nov 8, 2016

has changed the outlook.

• Current rise in input prices, as

well as possibly higher than

expected inventories will likely

put a strain on cement

companies’ margins in the

following quarters

• As petcoke prices have

continued to rise, companies

are actively switching to coal;

and decreasing the use of

petcoke. There is renewed

focus on using green and

alternative source of fuels

-40%

0%

40%

5

10

15

20

25

30

LH - cement production (mn tons) RH - MoM change (%)

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Final remarks

Pricing

– CFR petcoke prices keep rising and are expected to remain firm. Is this a

long term trend?

– Domestic coal becoming an important alternative

End-users: Cement

– Impact of demonetization on realty sector – especially new projects?

– With strong demand for cement expected in the industry (infrastructure

sector), do high fuel prices pose threats to the market?

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