Power demand lifts Vietnam’s April-May coal imports

Spanish Market: Coal
24/06/24

Vietnam's coal imports in April-May rose from a year earlier on strong demand from utilities to cater for increased electricity consumption in households and industries.

Imports reached 6.5mn t in May, up from 4.97mn t a year earlier, and from 5.9mn t in April, provisional customs data show. April imports were up by 66pc from a year earlier, according to the data. The imports reached 27.1mn t in January-May, up from an estimated 16.87mn t in the same period a year earlier.

Vietnam could end up importing close to 65mn t of coal this year at the current average rate of 5.42mn t/month, according to Argus calculations based on the customs data. This could be the highest annual imports after the southeast Asian nation received about 55mn t of imported coal in 2020, and the imports could also be up from 2023's tally of 51.16mn t.

Vietnamese customs data do not differentiate between coking and thermal coal. Trade data analytics platform Kpler estimates Vietnamese May coal imports at about 5.8mn t, which includes about 4.2mn t of thermal coal.

The year-on-year increase in imports underscores an increase in coal-fired generation to cater for power demand during the dry season. This also underlines a wider trend in Asia where generators have been restocking for peak summer as heatwaves have spread in the region that could buoy power demand as well as coal burn at power plants, and support demand for imported coal.

Electricity consumption in the country has increased because of continued economic recovery and an uptick in air-conditioning demand, utility EVN said. Power demand continues to grow, and the peak capacity of the national power system reached 49.53GW on 19 June, up from 45.53GW a year earlier, it said. Peak capacity might increase further to 52GW this month, it added. Authorities have directed EVN and state-owned coal producers to ensure stable supplies to meet the increased power consumption.

Overall power generation reached 28.1TWh in May, up by 11pc from a year earlier, EVN data showed. Overall generation rose by 12pc from a year earlier to 124.25TWh in the January-May period. Coal-fired generation was at about 73.97TWh, accounting for nearly 59.5pc of the generation mix during the period. The coal-fired generation likely edged higher to 17.08TWh in May, up from 16.9TWh in April, according to Argus calculations based on EVN data. The share of hydropower and renewable energy during January-May stood at 15.4pc and 14.2pc, respectively. Vietnamese hydropower generation might edge higher in coming weeks with the onset of seasonal rains in parts of the country.

The uptick in power consumption and coal demand during the first five months of the year was also supported by an increase in economic activity, with Vietnam's industrial production index rising by 8.9pc in May, up from 0.5pc a year earlier. Residential and services electricity consumption increased by about 18pc, while industrial power demand rose by 12pc from a year earlier, EVN said.

The increase in receipts of seaborne coal also followed softness in international coal prices, especially for coal from Vietnam's preferred origins — Indonesia and Australia. Argus assessed Indonesian GAR 4,200 kcal/kg coal at $53.83/t fob Kalimantan on 21 June, down by 6.4pc from $57.50/t on 8 March, the highest level for 2024 so far. Argus assessed the Australian NAR 5,500 kcal/kg coal market at $87.61/t fob Newcastle on 21 June, down from $96.59/t fob Newcastle on 1 March — the highest value for the grade in the year to date.

Vietnamese customs did not provide the origin breakdown of the coal imports.

Power saving

EVN has advised local authorities, businesses, commercial and residential consumers to ensure economical and efficient use of electricity.

It has asked commercial units and households to reduce consumption, and advised them to not set air-conditioner temperatures below 26-27°C.

Vietnamese authorities have asked power consumers to pay special attention to electricity usage during peak hours between 11:00am to 3:00pm local time (04:00-08:00 GMT) and 7:00pm to 11:00pm.

By Saurabh Chaturvedi

Vietnam's coal imports (mn t)

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