HANOI: According to the Quang Ninh provincial customs sub-department, the locality imported 1.6 million tons of coal in the first four months of 2016, which was even higher than the import volume in 2015 (1.4 million tons). Within a short time, 18 companies imported dust coal directly from Russia, Australia, China and Indonesia to provide to electricity, fertilizer and cement plants.
Vinacomin, which reported a high inventory level of 10 million tons of coal, was the biggest importer among the 18 companies. The director of a company estimated that Vincomin has imported 300,000 tons of coal, while it plans to import 1.5 million tons this year. The director said imported coal is $5-10 per ton cheaper than Vietnam’s coal.
“Vinacomin obviously is facing big difficulties. As coal is cheap in the world market, businesses now rush to import coal to feed their factories,” he said, adding that there is no sign of a new coal price increase in the time to come. Nguyen Huy Dong from the Quang Ninh provincial customs sub-department said with the zero percent import tariff, coal imports to Quang Ninh province this year were expected to increase sharply, about several millions of tons.
Meanwhile, Vinacomin, when reporting a high inventory level, said sales have been going slowly because some fertilizer plants – the big coal consumers – are meeting difficulties in market access, while some electricity plants have met troubles and cement plants have shifted to use coal imports.
The figure of 10 million tons of coal unsold is described by analysts as ‘alarmingly high’. In the past, the inventory level once reached 7-8 million tons. However, this was attributed to the low consumption level by major consumers – electricity, fertilizer and cement plants. But now, this is blamed on less competitive domestic coal in comparison with imports.
An analyst warned that the situation may get even worse for Vinacomin as from July 1, the state will impose higher tax on the exploitation of natural resources. “Vinacomin, a big miner, has never had to compete so fiercely with the Dong Bac Corporation and some other suppliers before,” the analyst said. He noted a tendency of domestic thermalpower plants using imports instead of domestically exploited coal. The Duyen Hai 3 Thermopower Plant in Tra Vinh province, once operational, slated for the end of 2016, will import 3.5-4 million tons of coal every year from Indonesia.
