PIBT evaluates $70 million capacity expansion
KARACHI: Despite record high prices, the demand for coal remained stable, while the Pakistan International Bulk Terminal (PIBT) is evaluating a $70 million investment in increasing the terminal’s coal handling capacity, its chief financial officer (CFO) Arslan Iftikhar said.
“Presently, PIBT has a coal handling capacity of 12 million tonnes, and last year we handled over 10 million tonnes,” Iftikhar said, adding: “Infrastructure projects are planned and developed in advance, and we see increased demand, going forward. We are all set to enhance the capacity to 16 million tonnes, which is estimated to cost around $70 million.”
The Pakistan International Bulk Terminal is a fully mechanised bulk cargo handling terminal in the country on Build, Operate and Transfer (BOT) basis as per the international standards.
“PIBT is a national infrastructure project, which has been providing state-of-the-art terminal services since the commencement of its commercial operations in April 2017,” Iftikhar said.
The economic recovery is pacing with a boom in the construction sector, and coal is required by every industrial unit using boilers.
“[The] local cement demand in the recent months has been lacklustre due to heavy monsoon rains in Punjab coupled with [the] construction activities halted by Eid and Muharram,” Muhammad Waqas at JS Global Capital said.
“We believe the demand will pick up, going forward, putting [the] companies in the North Region in a position to increase [the] prices to pass-on the impact of rising input costs, particularly the coal price hikes.”
Moreover, with the relative stability in Afghanistan and Chinese investment commitments, cement and steel demand in Afghanistan would multiply. This would open up opportunities for Pakistan’s cement and steel firms, resulting in increased demand for fuel by the local industrial units.
The PIBT CFO said given record high coal prices, “We anticipate some slowdown in the demand for a couple of more months, then it will normalise”.
Iftikhar said that the international coal prices were primarily influenced with unprecedented Chinese demand ahead of Christmas and Year-end. “We hope this demand will ease by November 2021.”
He said recently the freight charges across the globe had increased to an all-time high of $36,000/day. Also, coal is now being traded at an all-time high of $150/tonne.
“The anticipated rise in coal prices and resultant urgency of the importers to purchase coal, coupled with the inefficiency of the importers to schedule their vessels, is the major reason for the recent congestion at PIBT but they are unnecessarily questioning the capacity of the terminal,” Iftikhar said.
“The terminal can discharge a 60,000 tonne coal vessel in less than two days of operations,” the PIBT CFO said, adding that earlier the imported coal was handled manually at the stevedoring berths at the Karachi Port Trust (KPT0, which took 8 to 10 days/ship, that too without compliance of environmental laws and approval of the Sindh Environmental Protection Agency.
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