Petroleum Coke CIF Supply 50,000MT to 400,000MT Monthly with SPA and LC Procedure

Large-volume petroleum coke procurement depends on three things: verified supply, clear payment security, and a shipping procedure that both sides can follow without delays. When a buyer is contracting for 50,000MT to 400,000MT per month, small gaps in documentation can become costly setbacks at the port, with the bank, or during inspection.

This guide sets out the CIF supply structure, monthly quantity range, indicative pricing terms, and the working procedure for a petroleum coke transaction built around an ICPO, SPA, charter party arrangement, SBLC or DLC, SGS inspection, and final payment after destination verification.

Bulk petroleum coke supply begins with verified product availability and export readiness.

Commercial supply overview: Petroleum Coke

The proposed petroleum coke supply is structured for recurring monthly delivery under CIF terms. CIF means the seller is responsible for cost, insurance, and freight to the buyer’s nominated discharge port, subject to the terms agreed in the final SPA.

The working quantities and price indications are as follows:

Commercial item	Term
Product	Petroleum coke
Minimum monthly quantity	50,000MT per month
Maximum monthly quantity	400,000MT per month
Delivery basis	CIF to buyer’s designated discharge port
CIF price indication	USD $110.00/MT
Net CIF price indication	USD $100.00/MT
Buy-side commission	USD $5.00/MT
Contract basis	ICPO, SPA, LC instrument, inspection, and shipment documents

Because petroleum coke is a bulk commodity, the SPA should define the product quality in detail. That normally includes the agreed specifications, testing standards, delivery schedule, tolerance, origin, shipment size, destination port, inspection procedure, claim process, and payment timing.

The pricing terms listed above should also be confirmed in the signed agreement. If there is a gross price, net price, and commission component, the SPA and NCNDA/IMFPA should clearly show how each amount is handled and when it becomes payable.

Why the CIF structure matters

CIF is common in international bulk commodity trade because it gives the buyer a delivered-port framework while allowing the seller to manage the freight arrangement. Under this model, the seller arranges carriage and insurance to the agreed discharge port.

That does not remove the need for buyer-side controls. It makes the document sequence more important.

For high-volume petroleum coke, the buyer should confirm:

• The discharge port can receive the vessel size used for the shipment

• The port accepts petroleum coke under local handling rules

• Customs and import permits are available where required

• The buyer’s bank can issue the required SBLC or DLC

• The inspection company and testing terms are named in the contract

• The payment release trigger is clear and tied to agreed documents

  
  

CIF can work well when the seller has real supply access and shipping capability. It can create problems when parties agree to broad terms before confirming banking capacity, port readiness, or proof of product standards.

The strongest transactions keep each step tied to written documents, bankable instruments, and verifiable shipment actions.

Product quality and specification checks should be addressed before shipment.

The working procedure begins with the buyer’s ICPO

The first step is the buyer’s Irrevocable Corporate Purchase Order, commonly called an ICPO. This document should incorporate the seller’s standard CIF working procedure and include the buyer’s company registration certificate.

The ICPO should identify the buying entity and set out the commercial intention clearly. It should include the product, monthly quantity, destination port, requested delivery schedule, accepted procedure, banking readiness, and authorized signatory details.

A properly prepared ICPO helps the seller confirm whether the buyer is ready to contract and whether the requested volume and destination can be serviced.

The buyer should avoid sending a vague ICPO. A weak ICPO can delay the SPA stage because the seller may need further clarification on destination, quantity, payment instrument, or corporate authority.

The SPA sets the binding transaction framework

After receiving the ICPO and registration documents, the seller issues the Sale and Purchase Agreement. The buyer reviews the SPA, requests amendments if needed, signs it, and returns it in Word format within 3 banking days.

Once both sides agree on the wording, the seller sends the final SPA in PDF format. The buyer then confirms the final SPA and issues a letter of acceptance.

This step is where the transaction becomes more precise. The SPA should align all major terms before either party makes shipping, banking, or port commitments.

Key items to check in the SPA include:

• Product name and technical specification

• Monthly contract quantity and shipment tolerance

• Price per metric ton and commission structure

• CIF destination and discharge port

• Inspection company and inspection location

• SBLC or DLC issuing timeline

• Performance bond terms

• Shipment schedule and loading window

• Governing law and dispute handling

• Required transaction documents

• Payment release conditions

  
  

The buyer and seller should make sure the signed SPA reflects the exact working procedure. If the procedure is only discussed by email but not included in the contract, disputes can arise later over which step controls the transaction.

Initial transaction documents confirm supply readiness

After the SPA stage, the seller sends a set of transaction documents to the buyer by email. These documents support the seller’s commitment and the product’s availability for the transaction.

The listed documents are:

Document	Purpose
Commitment to supply	Shows the seller’s written commitment to provide the product under the contract
Statement of product availability	Confirms that the product is available for the agreed transaction
Certificate of origin	Identifies the stated origin of the petroleum coke
Product passport	Provides product-related identification or specification information
Export license	Supports the seller’s ability to export the product, where applicable

The buyer confirms receipt by email and issues a confirmation letter within 24 hours. This confirmation is a record that the buyer received the initial seller documents and is ready to proceed to the next step.

At this stage, the buyer should review document consistency. Company names, product description, quantity, origin, contract reference, and dates should match across the file. Any mismatch should be corrected before the transaction moves to freight, title, or banking activity.

Charter party arrangements cover the first shipment

For the first shipment, the seller arranges chartered freight with a recognized shipping company to transport the petroleum coke to the buyer’s nominated discharge port. The seller, buyer, and shipping company then sign a three-party Charter Party Agreement, or CPA.

Under the stated procedure, the CPA cost for the first shipment is paid jointly by seller and buyer on a 50/50 basis by T/T wire transfer directly to the shipping company. The fee is later refunded or deducted when the buyer pays for the total product cost.

This CPA structure should be handled carefully. The SPA and CPA should state:

• The vessel or shipping arrangement covered

• The loading port and discharge port

• Which party pays which amount

• Whether the buyer’s 50% contribution is refundable or deductible

• When the refund or deduction applies

• What happens if loading does not proceed

• Which shipping company receives the payment

• What evidence of payment and booking will be issued

  
  

The safest version of this step is one where all payments go directly to the named shipping company, never to an unrelated third party. The buyer should also confirm that the carrier or shipping company is real and that the CPA terms match the cargo and route.

The first shipment procedure includes a three-party charter party arrangement.

Title transfer and export legalization follow the CPA

After the SPA and charter arrangements are completed, the seller issues a product title transfer agreement to the buyer. The buyer signs and returns the document.

The seller then legalizes the contract with the relevant authorities and sends the buyer the legalized contract and certificate of product title transfer. The seller also proceeds with port clearance, customs clearance, and internal operational routines.

This is a critical stage because it connects the commercial contract to export permissions and port readiness.

The buyer should check that the title transfer language does not conflict with the payment terms. In many bulk commodity transactions, title passage, risk transfer, and final payment timing must be stated clearly. If one clause says title transfers before shipment and another says title transfers after payment, the parties need to correct the conflict before loading.

Proof of product documents support export approval

Once export approval is confirmed by the relevant authority and the CPA and shipping schedule are endorsed by the port authority, the seller releases additional proof of product documents.

The listed proof of product file includes:

Proof document	What it supports
Legalized CPA with loading port authority	Shows port recognition or endorsement of the charter arrangement
Injection report	Supports product movement or loading preparation where applicable
Product allocation certificate	Identifies product allocated to the buyer’s transaction
Allocation title transfer certificate	Supports transfer of allocation rights under the agreed procedure
Export license	Confirms export authorization where required
Export approval	Shows authority approval for export
Tank receipt	Confirms storage or holding record where applicable
Dip test authorization	Allows inspection or measurement procedure where relevant

Some document names are more common in liquid trades than in dry bulk trades, so the SPA should define exactly how each document applies to petroleum coke. If tank receipts or dip test authorizations are used, the parties should make sure the terminology matches the actual storage and inspection method.

For petroleum coke, documents tied to stockpile location, warehouse receipt, terminal receipt, quality certificate, draft survey, and loading inspection may also be relevant depending on the logistics setup.

LC issuance and the 2% performance bond

After the proof file stage, the seller issues the commercial invoice to the buyer. Within 5 working days, the buyer’s bank issues either an operative Standby Letter of Credit via Swift MT760 or a Documentary Letter of Credit via Swift MT700 to the seller’s bank.

The instrument should cover the full value of the first shipment. Once the SBLC or DLC is issued as agreed, the seller lodges and activates a 2% performance bond or performance guarantee in favor of the buyer.

The purpose of the performance bond is to protect the buyer if the seller fails to supply the cargo according to the contract. Under the stated procedure, if the seller fails to supply the cargo or shipment, the 2% performance bond is paid or forfeited to the buyer.

This step needs clean banking language. The SPA should state:

• Whether the buyer will issue SBLC MT760 or DLC MT700

• The issuing bank and acceptable bank rating requirements, if any

• The value covered by the instrument

• Expiry date and shipment validity

• Required wording

• Conditions for drawing or payment

• Performance bond format and issuing bank

• Timing for the seller’s bond after LC receipt

  
  

Both sides should have their banks review the proposed LC wording before issuance. A small wording error can make a letter of credit difficult to use or unacceptable to the receiving bank.

Banking and inspection documents should match the agreed contract terms.

SGS inspection verifies the cargo

The seller bears the SGS inspection charges at the loading port. The inspection confirms that the shipment meets the agreed contract requirements before loading or during the loading process, depending on the contract terms.

The seller may invite the buyer to witness the final inspection and attend a table-top meeting for future transaction negotiations. Buyer attendance is optional under the stated procedure.

The inspection clause should define:

• Inspection company

• Inspection location

• Sampling method

• Quality parameters

• Quantity measurement method

• Certificate release timing

• Who pays for additional inspection at destination

• How disputes in quality or quantity are handled

  
  

For petroleum coke, inspection can cover specifications such as moisture, ash, sulfur, volatile matter, fixed carbon, sizing, and calorific value if those values are part of the SPA. The contract should list the exact specification set rather than relying on general product descriptions.

Intermediary protection should be documented

Where intermediaries are involved, the seller signs an NCNDA/IMFPA among the parties. A notarized copy is sent to the seller’s bank.

For commission-based transactions, clear documentation helps prevent later disputes. The NCNDA/IMFPA should match the commercial structure stated in the SPA, including the buy-side commission of USD $5.00/MT if that is the agreed commission.

Commission documents should identify:

• Protected intermediaries

• Commission amount per metric ton

• Payment timing

• Paying party

• Contract duration

• Shipment coverage

• Bank coordinates for commission payment

• Non-circumvention obligations

  
  

The commission agreement should not conflict with the invoice, LC, or final payment flow. If the commission is built into the gross price, the document should say so clearly. If it is paid separately, the timing and source of funds should be stated.

Loading, shipment, and final payment

Once the required documents, LC instrument, performance bond, inspection, and shipping schedule are in place, loading and shipment begin according to schedule.

After the vessel arrives at the discharge port, the destination SGS process is finalized if required by the contract. The buyer then releases payment by swift fund transfer within 3 to 5 banking days to the seller for the total product value, subject to the agreed payment terms and successful document compliance.

The final payment trigger should be written with care. The buyer and seller should agree whether payment is released against:

• Destination SGS certificate

• Discharge port quantity confirmation

• Full shipping document set

• Commercial invoice

• Bill of lading

• Certificate of origin

• Insurance certificate

• Packing or cargo statement, if applicable

• Any other documents required by the DLC

  
  

A clear documentary payment trigger protects both sides. The seller knows which documents will release payment. The buyer knows which proof must exist before funds move.

Due diligence keeps the procedure bankable

A monthly petroleum coke contract from 50,000MT to 400,000MT is a serious trade commitment. The procedure can be workable, but each step should be checked by commercial, legal, banking, logistics, and inspection professionals before funds or instruments are issued.

Practical due diligence includes confirming the seller’s authority to sell, verifying company registration, matching all contract names, checking export permission, confirming shipping arrangements directly with the carrier, and having the buyer’s bank review LC wording in advance.

This article is for general commercial information only and is not legal, banking, or financial advice. Parties should obtain qualified advice before signing, issuing bank instruments, or making payments.

A clean shipment process depends on aligned documents, inspection, and payment terms.

Key takeaway

A successful petroleum coke CIF transaction depends on more than price and quantity. The ICPO must be clear, the SPA must control the procedure, the CPA must match the shipment, the proof documents must be consistent, and the LC or SBLC must be bank-ready.

For a supply program of 50,000MT to 400,000MT per month, the best result comes from disciplined sequencing. Confirm the buyer, sign the SPA, verify product availability, secure shipping, complete title and export documentation, issue the bank instrument, inspect the cargo, load the vessel, and release payment only under the agreed documentary terms.