Pakistan’s thermal coal imports have recorded a noticeable rise of 10.8% m-o-m in Dec ’20 at 1.62 mn t against 1.46 mn t in the previous month, CoalMint vessel line-up data reveals.
The Power sector remained the top consumer of thermal coal at 0.70 mn t and also saw the highest rise of 38% m-o-m. Whereas, Pakistan’s cement sector’s coal imports have risen by 5% m-o-m at 0.59 mn t in December.
South Africa continued to be the top exporter of thermal coal to Pakistan. However, a significant rise of 38% m-o-m has been recorded in coal imports from Indonesia.
This can be attributed to Pakistan‘s preference to buy higher-quality South African coal in order to maximise the energy value of each tonne imported, whereas, the lower-quality Indonesian coal is mainly used for blending with higher grades.
Pakistan’s coal imports from Australia dropped by 24% m-o-m at 0.17 mn t as the Australian coal prices increased in December. Moreover, buying South African and Indonesian coal gives more freight–cost-advantage over the Australian coal.
Gas crisis leads to rise in coal usage
Pakistan has been dealing with severe gas supply issues since December due to its increased demand in winter season, delayed arrival of LNG import vessels and higher gas retentions allowed to Sui Southern Gas Company Limited (SSGCL) for K-Electric, resulting in reduced gas supply to domestic power stations by one-third during the month.
Thus, coal-fired power generation increased in Pakistan during the month and in turn the thermal coal demand.
Outlook
The gas crisis in Pakistan is set to worsen in Jan ’21 in the wake of increasing demand due to severe cold weather, delays in receiving the LNG cargoes amid surging global demand, and Sui Northern Gas Pipelines Limited (SNGPL) closing down it regasified LNG supply to the power sector. Moreover, canals are being closed in Pakistan for annual maintenance which would reduce power generation from other sources, and also induce increased coal-fired power generation and lead to higher coal imports.
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