Pakistan’s thermal coal imports fell for the second month in a row to 1.4 million tonnes (mn t) in Sept’21, down 4.2% m-o-m amid a sharp rise in global thermal coal prices, CoalMint’s vessel-line up data reveals.
The country’s coal imports from South Africa were recorded at 0.78 mn t, down 13% m-o-m, and imports from Indonesia were recorded at 0.23 mn t, down 12% m-o-m.
Indonesian high CV (5,800 GAR) coal prices moved up to $150/t in Sept’21, up 24% m-o-m, while Australian and South African (5,500 NAR) rates have risen to $150/t and $147/t, respectively, up 36% and 28% m-o-m.
Rising power demand, commodity prices
Amidst Pakistan’s economic recovery, power demand continues to remain strong. As per the latest data, the country’s power production hit an all-time high at 16,078 gigawatt hours (GWh) in Aug’21 on the back of strong demand for energy from industries and households, data from the National Electric Power Regulatory Authority (Nepra) said.
Owing to the escalated coal prices, the sharp rise in electricity usage was mostly met by furnace oil-based generation followed by nuclear power production and other renewables resources.
Power generation via coal and gas has seen a slight decline due to the sharp rise in coal and LNG prices globally. As a result, the cost for power generation rose by over 50% in Aug’21.
Market participants expect the country to increase its furnace oil imports in the coming weeks as power demand is seen rising rapidly.
Decline in cement sales continues
Pakistan’s cement sector, key user of thermal coal, witnessed a 12.2% y-o-y decline to 4.59 mn t in Sept’21, as per data from the All-Pakistan Cement Manufacturers Association. Cement sales declined by 6% y-o-y to 12.83 mn t during the Jul-Sept’21 period.
A sharp rise in input cost and ocean freight from South Africa to Karachi–which increased to $30/t from just $11/t in Sept’20–weighed on the country’s buying appetite of South African coal.
A sharp rise in cement prices also weighed on exports. However, sales in the domestic market were largely supported due to the government’s flagship housing scheme to construct five million dwellings for the economically backward segment.
Meanwhile, political unrest in neighbouring Afghanistan further dampened any major coal imports to the country. Cement manufacturers in northern Pakistan had begun buying high-CV coal from Afghanistan over the last few months.
Imports from Mozambique and US rise
Pakistan’s thermal coal imports from Mozambique rose to 0.11 mn t, up 112% m-o-m, while that from US rose slightly to 0.06 mn t in Sept’21, up 3% m-o-m.
The country’s coal imports from Australia fell 38% m-o-m to 0.12 mn t last month, while that from Russia and China was at 0.05 mn t each.
Outlook
Amidst the rising trajectory of thermal coal prices, Pakistan’s coal imports are likely to remain under pressure in the near term.
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