Pakistan’s thermal coal imports rose by 16% m-o-m to 1.1 million tonnes (mnt) in May 2022 after falling sharply in April, CoalMint’s vessel-line up data reveals.
A sharp decline in thermal coal prices from its peak in March 2022, following Russia’s invasion of Ukraine, compelled Pakistani traders to scale up their bookings.
Shipments, however, mainly came from South Africa and Indonesia last month while there were no vessels from Australia, Mozambique, or even Russia.
Trade balancing
Qty in mnt
Easing lockdown restriction in China is likely to be the reason behind nil imports from Mozambique and Russia to Pakistan last month.
Cheaper availability of Russian coal has compelled Chinese traders to turn down imports from any other destination which cooled off higher Indonesian, and South African coal prices.
Shipments from Indonesia rise by 51%
Pakistan’s coal imports from Indonesia were recorded at 0.7 mnt in May, up 51% m-o-m as a power supply crunch in the country compelled utilities to step up imports.
A sharp fall in Indonesian coal prices after touching the peak in March 2022 amid the absence of Chinese buying interest encouraged Pakistani traders to secure supply from the country.
The government has been cutting power to households with up to a fifth of total power generation offline due to the elevated prices of imported coal and LNG.
Paired with unsustainable fuel and power subsidies, the financial burden of such expensive power generation has become almost impossible for the government to bear, as the country is already facing an economic crisis.
South African coal imports rebound
Shipments from South Africa were recorded at 0.4 mnt, up by 22% m-o-m as South African coal prices eased by 14% in April from the peak of March, providing some relief to traders importing coal from the country.
The country’s cement sector, which is the largest importer of South African coal, has also been importing Afghanistan coal due to its relatively cheaper prices.
In the first ten months of the current financial year 2021-22 (that runs from 1 July-30 June), the country’s cement producers sold 44.3 mnt, down by 8% y-o-y, data from the All Pakistan Cement Manufacturers Association revealed. Total cement dispatches in April were at 3.52 mnt, down by 29% y-o-y.
Outlook
Increasing power demand during the summer season is likely to keep Pakistan’s coal imports high in June. However, elevated prices may curb any major rise in imports amid cheaper coal availability from Afghanistan and Tajikistan.
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