Experts list reasons for Pakistan's cement slowdown in 7MFY19

The Pakistan cement industry recorded a negative growth on domestic dispatches during the month of January 2019. As per APCMA data, local cement sales for the month came in at 3.1Mt, down a sharp 18 per cent YoY.

According to Intermarket Securities, the slowdown in local cement dispatches has been in place since elections and appears to be gathering pace. This could be attributable to lower PSDP disbursements, a more challenging macroeconomic environment and legal challenges on major private sector construction projects.
 
Furthermore, in 7MFY19 local cement sales were down four per cent YoY to 22.6Mt. Northern-based sales fell eight per cent YoY to 17.8Mt while southern-based sales increased 17 per cent YoY to 4.8Mt. The regional divergence is possibly due to some plants in the south understood to be selling in the south Punjab market (which falls under the northern region).
 
Capacities, especially in the south, also continue to be diverted towards exports, which have clocked in at 4.1Mt in 7MFY19, up 50 per cent YoY.
 
Overall industry utilisation based on 7MFY19 sales is 81 per cent (vs. 99 per cent in the same period last year).