Pakistan’s thermal coal imports fell to 1.5 million tonnes (mn t) in Aug’21, down 13% m-o-m as global thermal coal prices continued with their rising trajectory for the fifth straight month, CoalMint’s vessel-line up data reveals.
The country’s coal imports from Indonesia were recorded at 0.26 mn t, down 20% m-o-m, and imports from South Africa were recorded at 0.90 mn t, down 9% m-o-m.
Indonesian high CV (5,500 GAR) coal prices moved up to $115.38/t in Aug’21, up 15% m-o-m, while Australian and South African (5,500 NAR) have risen to $110/t each, up 25% and 10% m-o-m, respectively.
Rising power demand being met from oil and gas
To meet the country’s rising power demand amid economic recovery post-Covid, Pakistani importers are seen to be opting for electricity generation via oil and gas over coal.
During Jan-Aug’21, the country imported at least 0.79 mn t of fuel oil, up 52% y-o-y, according to industry reports citing data from tender documents and traders.
Pakistan’s overall LNG imports rose by 23% y-o-y to about 5.3 mn t though August this year, as per market reports.
On the supply side, imports from Indonesia fell as a severe domestic supply crunch in Indonesia last month resulted in a sharp rise in coal prices. The government imposed coal export sanctions on over 30 coal companies, while spread of Covid-19 slowed down mining activities.
Drop in cement sales amid escalated prices
Pakistan’s cement sector, key user of thermal coal, has been reporting a decline in sales over the past few months amid escalated global coal prices.
Cement prices had also risen sharply in August, resulting in a drop in demand despite the government’s flagship housing scheme to construct five million dwellings for the economically backward segment.
Owing to the sharp rise in South African and Indonesian coal prices, cement manufacturers in northern Pakistan had begun buying high-CV coal from Afghanistan over the last two months.
However, the ongoing unrest in Afghanistan has further clouded the prospects of coal coming from that country for the time being, leaving no option for manufacturers but to halt or reduce production.
Imports from US and Australia rise
Pakistan’s thermal coal imports from Australia touched 0.20 mn t in Aug’21 from nil in Jul’21, while imports from the US were recorded at 0.06 mn t, up 4% m-o-m.
The country’s coal imports from Mozambique fell 51% m-o-m to 0.05 mn t last month, while there were nil imports from Russia.
Outlook
Amid the rising trajectory of thermal coal prices, Pakistan’s coal imports are likely to remain under pressure in the near term.
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