Vietnam has imported a total of 27,6 million tonnes of coal.

DNHN - According to the General Department of Customs, Vietnam's coal imports for the period beginning July 1, 2023 (July 1 to July 15) reached 3.51 million tonnes, which is double the 1.69 million tonnes recorded for the same period in 2022.

Vietnam's coal import turnover reached 450 million USD on July 1, 2023, a 10% increase over the same period in 2022. Vietnam imported a total of 27.6 million tonnes of coal between the beginning of the year and July 15. This is the highest amount of imported coal since 2021, with a total value of USD 4.12 billion (as of July 15 each year). Compared to the same period in 2022, Vietnam's imports of coal increased by 50 percent but decreased in value by 11 percent.

Regarding the market, Australia is the largest supplier of imported coal with 10.8 million tonnes in the first six months of 2023, accounting for 43 percent of Vietnam's imported coal. In the first half of 2023, the value of coal imported from this market reached USD 1.89 billion. Vietnam imported 8.91 million tonnes from Indonesia, followed by 1.72 million tonnes from the Russian market.

Compared to the same period last year, coal imports from all three major markets increased by double digits, with Australia's volume increasing by 27%, Indonesia's by 59%, and Russia's by 20%.

In 2022, global coal prices increased by 66 to 138 percent as a result of military conflicts driving up energy prices; the imposition of sanctions against Russia compelled Europe to use alternative energy sources, including coal; and economies reopened following the Covid-19 pandemic.

In the meantime, domestic coal demand weakened due to the downturn of the real estate market (since the second quarter of 2022) and China's Zero-Covid policy (Vietnam's largest cement export market, accounting for 54% of total cement export volume in 2021), making manufacturers fiercely competitive. As a result, selling prices only increased by 5-10%, profits decreased, and there were times when businesses only broke even.

In this context, the sharp decline in coal prices year-to-date and the expectation that the average price for the entire year will be significantly lower than in 2022 are expected to be significant variables that help coal-intensive businesses increase their gross profit margin.

Positive factors include the recent trend towards a decline in the domestic interest rate level and a reduction in USD/VND exchange rate volatility. This will assist businesses in alleviating the pressure of rising financial and fuel import costs.

Ngoc Phi (TH)