Vietnam's state-owned coal producer Vietnam National Coal and Mineral Industries (Vinacomin) plans to nearly double its coal imports next year to meet an anticipated uptick in demand from utilities.
Vinacomin's imports are expected to increase to 16mn-17mn t in 2024, from an anticipated 9mn t in 2023, an official with knowledge of the matter said. The imports will be done through tenders and Vinacomin has recently shortlisted 15 coal traders to participate in the tenders, the official added.
The decision by the coal producer to increase imports is in line with its plans to ramp up supplies of blended domestic-imported coal cargoes to utilities to meet the expected increase in power demand resulting from an uptick in the country's economic growth. The imports would also increase as state-owned utility EVN has mandated Vinacomin to source imported coal on its behalf for meeting the bulk of its seaborne coal requirement, the official added.
Vinacomin's move also comes as the country is facing stagnation in its domestic coal production. The expansion of domestic output is a challenge as relatively expensive underground mining accounts for the bulk of the local production, making growth plans unviable because of tight government controls on coal pricing. Domestic coal is priced at a sharp discount to the prevailing international prices.
Vietnam's domestic coal output in January-September slipped to 36.6mn t from 37.7mn t in the same period a year earlier, according to the country's General Statistics Office (GSO), with the decline continuing to support the prospect of imports. Vietnam imported 37.77mn t of coal in the first nine months of this year, up from 24.4mn t for the same period a year earlier, provisional customs data show. Vietnamese customs data do not differentiate between coking and thermal coal.
But demand from utilities has continued to increase with the rise in power demand as well as growth in economic activity. Total power supply in the system, including generation from all sources of energy and imports, reached 209.9TWh in January-September, up by 3.1pc from the same period in 2022, according to state-owned utility EVN. Industrial coal demand likely edged higher with Vietnamese industrial production rising by 5.1pc in September from a year earlier, according to the GSO data.
The country's GDP in the July-September quarter is estimated to have grown by 5.3pc from a year earlier, the GSO data show. Vietnam's cement output rose to 10.2mn t in September from 9.8mn t in August and the revised 8.7mn t in the same month last year. Its crude steel production increased to 1.56mn t last month from the revised 800,000t a year earlier, also supporting the outlook for coal imports.
The country sees coal imports steadily rising over the next decade before peaking at around 85mn t in 2035. Coal imports are projected to reach about 73mn t by 2030 and rise further by about 12mn t to their peak in 2035, according to the government's latest national energy master plan.
