The All Pakistan Cement Manufacturers Association (APCMA) has voiced its concern regarding steep increases in coal prices, which in turn is impacting the cost of cement production. Coal prices have increased from US$54/t in May 2016 to US$105/t. With coal constituting more than 30 per cent of total production cost, cement manufacturers’ have witnessed a significant decline in profits.
The price of coal has gradually increased since May 2016 when China imposed supplyside measures to limit coal mining capacity.
In addition, stricter local rules have also been imposed on coal transportation.
Meanwhile, cement manufacturers have appealed to the government to take steps to boost the housing sector, as the cement industry is currently deriving most of its sales from infrastructure projects. The producers have said that a growth in housing construction will be essential to absorb additional capacity coming online in the next two years.
According to the APCMA, in the first four months of the current fiscal year the cement industry recorded an 11.26 per cent YoY growth in local despatches and exports grew 1.73 per cent YoY. Domestic despatches in October 2016 were recorded at 3.008Mt (+15.88 per cent) while exports reached 0.518Mt (-1.96 per cent). Total cement dispatches for the months amounted to 2.527Mt (+12.87 per cent) and capacity utilisation was 92.77 per cent.
