Karachi: Price of cement in Pakistan may increase in the near future due to hike in price of coal at the global level, a news source reported. The international coal prices in July 2021 rose to the highest level since 2008.
The price of Australian coal was valued at USD 152 per tonne at the end of the previous month, which was nearly 195% more than that figures recorded last year. Due to this, an increase in the local prices of cement can be expected. However, prices of cement in the local market has increased over the last two months.
It was reported that there is a possibility that authorities can refrain the manufacturers from passing the increase on to the consumers.
Pakistani industries greatly rely on coal for operations. According to sources, Pakistan imports 16 million tonnes of coal each year. Power plants use two-thirds of the imports whereas the remaining is utilized by the general and cement industry. However, the United Nations Statistical Division and International Trade Centre disclosed that Pakistan’s imports in 2020 were 17.1 million tonnes. Additionally, it was mentioned that more than one-fifth of the electricity in Pakistan is produced in plants where coal is used as fuel.
Talking to the media, Lucky Commodities Chief Executive Officer (CEO) Tahir Ahmed informed that the going rate for cost-and-freight coal import from Russia and Australia is over USD 180 per tonne. As far as South African coal is concerned, the rate is USD 156 per tonne.
While talking about the reasons of high prices, AKD Securities states that coal prices are increasing due to high gas prices in Europe. The coal plants producers are given preference over gas-based power producers because of escalating demand for electricity.
Another reasons for the rise in coal prices is the coal demand from China. Earlier this year, the southern region’s hydroelectric dams were knocked out because of the drought. Arif Habib Commodities CEO Ahsan Mehanti stated that the rise in coal prices in Pakistan is noticeable because of the exchange rate factor.
As per the details shared, the prices of coal will remain elevated because the new environmental regulations have made it challenging for miners to get permits to dig out more coal.
Iqra holds BS in International Relations and is passionate about writing engaging content on trending real estate topics. When not working, she is either spending time with family, shopping, or discussing shows & movies.
