Pakistan: Coal Imports Down 2% Y-o-Y in CY19

Coal imports by Pakistan have taken a step back from the levels attained in the previous year, thus refuting the hopes that it could become a major growth destination for global exporters.

According to the data compiled by CoalMint Research, the country had imported 14,507,885 MT coal in CY19, which was marked 2% lower on the year from 14,731,589 MT in CY18.

With a fleet of new coal plants on the drawing board supported by Chinese finance under the China-Pakistan Economic Corridor (CPEC) program, it was anticipated that Pakistan would register progressive rise in coal imports. However, there are already signs which have shown that the opportunity would be more limited than hoped.

In Jan’19, the country had cancelled its proposed 1,320 MW Rahim Yar Khan imported coal-fired power project, on the grounds of sufficient power capacity on board, and citing the growing burden on fossil fuel imports which was aggravated by depreciation of Rupee.

Pakistan’s power sector remained the major coal recipient during CY19, with imports of 7,010,210 MT coal which accounted to 48% share in total coal volume. Cement industries came in behind with a share of 28% while taking imports of 4,005,019 MT coal during the CY19.

Nevertheless, the weakened rupee and consequent cost of coal imports had impacted the CPEC coal-fired power plants that are already operational. Besides, lower-than-expected power demand growth was also a hindrance to the coal plants that are both planned or already operating.

In addition, subdued cement sales was also a cause of concern for the manufacturers, which had limited their coal buying in CY19.

Consequently, Pakistan’s imports had seen a successive Y-o-Y decline during Mar-Sep’19 period. In fact, coal volumes had rebounded in the fourth quarter of CY19 (Oct-Dec’19) by posting a noticeable Y-o-Y growth in each month, but the monthly intake was assessed almost flat over the period.

Major Coal Suppliers:
South Africa remained the major source for Pakistan’s coal requirement in CY19. The country had supplied 11,068,184 MT coal in CY19, which was marked 22% higher on the year from 9,069,572 MT in CY18. Incidentally, it was the only rise noted amongst the list of coal suppliers.

Coal intake from Pakistan’s second-largest exporter-Indonesia, was down 17% Y-o-Y to 3,212,373 MT in CY19 as against 3,891,640 MT in CY18.

Pakistan had confined its import sources to South Africa, Indonesia, US, Russia and Mozambique in CY19, wherein no shipments were recorded from other origins, contrary to the case witnessed last year.

Source: CoalMint Research
Quantity in MT

Going forward, the Pakistan government has drafted a new renewable energy policy which would set national targets for renewables (excluding hydro) to reach 30% of installed capacity by 2030, the plan is likely to suppress coal intake in the country.