After falling for two months consecutively, Pakistan’s thermal coal imports moved up by 37% m-o-m in March to 1.30 mn t against 0.95 mn t in February, CoalMint’s vessel line-up data revealed.
Country-wise imports from South Africa saw a dramatic increase of 94% m-o-m in Mar ’21 to 0.98 mn t, while imports from Indonesia increased by 22% to 0.26 mn t. On the other hand, the said country’s Australian coal imports fell by 67% to 59,963t.
Cement sector drives up coal demand in Pakistan
Pakistan’s cement sector, which is one of the prime consumers of South African coal, posted its highest-ever monthly sales growth of 44% y-o-y and of 26% m-o-m at 5.77 mn t in Mar’21 on the back of an increase in domestic consumption and exports, according to the All Pakistan Cement Manufacturers Association (APCMA).
Last year in Apr’20, the government of Pakistan launched low-cost housing scheme to provide 5 million houses to the homeless people of the country which is being undertaken in full swing, resulting in increased domestic cement demand.
South African coal replaces Australian imports
Australia has not been a key destination for Pakistan to import coal from. However, the fall in Australian coal prices last year amid the Chinese ban made it a lucrative option for Pakistan’s cement and power producers.
In Mar ’21, severe storms led to shutdown of Australia’s Newcastle port for two weeks and also disrupted the Hunter Valley rail lines (key carrier of coal from mines to port). The loading activities at port came to a halt and Australian coal prices shot up further, discouraging buyers from purchasing Australian coal.
Whereas, although imports from Indonesia recorded an increase, it was still not available in the desired quantity amid increased demand from China.
With no option left and due to increased demand especially from the cement sector, Pakistani buyers opted for the usually-preferred high CV South African coal, resulting in a dramatic increase in March import numbers from South Africa.
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