Rising coal prices set to affect profits of cement companies in Pakistan

After a period of steady prices, the international price of coal is increasing. As a result, the industries that rely on coal as a source of fuel for production, such as energy and cement, are predicted to suffer from a fall in profits.

The Richard Bay Coal Terminal (RBCT) in South Africa is the single largest export coal terminal in the world. Pakistan imports from the terminal due to its close proximity to the country compared to other large terminals. Coal prices from Richard Bay have risen from US$71.34/t in September to US$80.48/t in October. The price of coal for November was also predicted to be around US$90/t. Industry insiders have said that cement companies could take a hit of between 3 – 7% on their earnings. The high cost of coal imports in Pakistan is also due to the depreciation of the rupee against the dollar.

The fortunes of the cement and energy industries are predicted to change with the fluctuations in the prices of coal. Cement manufacturers in Pakistan are exploring the possibilities of using indigenous coal. The country is said to have huge coal resources, around 186 billion t, but this has not yet been mined for various reasons.

Edited from various sources by Rosalie Starling

Read the article online at: https://www.worldcement.com/asia-pacific-rim/04112013/rising_coal_prices_set_to_affect_profits_of_cement_companies_in_pakistan_374/