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Egypt 2019 thermal coal imports rise 31% on cement sector demand

Highlights

El Arish Cement remains largest consumer

Construction sector boosts demand

London — Egypt imported 6.32 million mt of thermal coal in 2019, up 31% on the previous year, according to official data from the Port of Alexandria, boosted by strong demand from the cement sector.

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Officials at the port confirmed that most of the coal loadings were of US origin.

Egypt's thermal coal imports experienced two consistently healthy years of growth with imports rising gradually in 2019 and spiking enormously by 174% in 2018 to total 4.81 million mt, from 1.75 million mt in 2017.

Egypt's largest cement producer El Arish Cement remained the country's largest importer of thermal coal, taking 2.04 million mt or 32% of total coal imports in 2019, up from 28% of total thermal coal imported in 2018. This plant alone represents around 17% of Egypt's national capacity.

The dramatic increase in thermal coal imports in Egypt, which has a larger cement sector than any country in the Gulf Cooperation Council (GCC), was explained by market participants to be driven mainly by the cement industry and was most definitely "construction related."

"Egypt mainly uses coal in the cement sector," a European-based analyst said.

Over the past five years, Egypt prompted a wide-spread switch from the more expensive heavy fuel oil to cheaper thermal coal and alternative fuels due to slashed government fuel subsidies for heavy industries, according to market sources.

Looking forward, more competitively priced petcoke is anticipated to enter the market, with several Mediterranean-based sources expecting buyers to start looking at petcoke as a more economic replacement for coal, especially with rising prices for US-based coal as well as rising freight rates.

S&P Global Platts assessed the New Orleans to Alexandria 50 kt coal freight rate at $22.25/mt Wednesday, down 50 cents on the day.

Egypt's total thermal coal imports rise 31% on year in 2019

Year

Volume (mt)

% change on year

2017

1754672

-33%

2018

4813920

174%

2019

6317318

31%

Source: Official statistics from Port of Alexandria, Egypt