Power sector drives up Pakistan’s coal import shipments by 14% in Jul’20

CoalMint’s vessel-lineup data reveals that Pakistan (majorly importing thermal coal), has recorded an increase of 13.8% in Jul’20 as its coal imports during the month stood at 1.24 mn t against 1.09 mn t in Jun’20.

A surge of 53% m-o-m was observed in case of coal imports by power sector at 0.64 mn t. On 28 Jul’20, the country achieved a new record of per day power generation at 23,116 MW. The highest generation level achieved so far was 20,811 MW on the 24 July 2018.

Due to COVID-induced lockdown in the country starting Mar’20, country’s power generation suffered till May’20. However, starting June and later in July, situation improved quite a bit as economic activities picked up and industries opened post removal of lockdown restrictions.

In case of thermal coal imports from cement sector, which is also a key consumer of coal, the same recorded an increase of 3.5% m-o-m at 0.36 mn t.

Pakistan’s cement sales soared by 38% y-o-y in Jul’20 to 4.83 mn t in the wake of buoyant domestic and export demand.

South Africa remained the top supplier of coal to Pakistan at 0.94 mn t (+7.2% m-o-m) followed by Indonesia at 0.21 mn t (-1.6% m-o-m). Interestingly, first time an import shipment of about 51,000 tonne from Australia and 34,000 tonne from U.S. was recorded during the month.

Pakistan’s Jan-Jul’20 coal import shipments drop by 3% y-o-y

• In the first seven month (Jan’20-Jul’20), Pakistan coal import shipments totalled at 8 mn t against 8.25 mn t in the same period last year.
• South African imports accounted for 4.96 mn t during the same period (-20.8% y-o-y) and imports from Indonesia stood at 1.84 mn t (+1.1% y-o-y).
• Sector-wise major Coal Imports were from power sector (-12%), cement (+14.5%), traders (+68%), chemical (+17%) and textile (+5%).

Outlook

Pakistan is one of the flagship markets for China’s Belt and Road initiative, with more than USD 70 billion of projects including coal and liquefied natural gas fired power plants helping the nation end decades of electricity shortfalls.

Subsequently coal usage is set to expand in the long-run. Until 2016, Pakistan had just one coal-burning power plant but now has at least nine and more are in the making.

With only one coal mine in Thar region, Pakistan will be largely dependent upon imports to meet its coal requirement for power generation.