Prices in Pakistan's northern region start to fall
A research house in Pakistan hints the start of a decline trend in cement prices in the north. Its channel checks show that average retail prices in the north region have fallen by PKR50/bag (US$0.35) to PKR550/bag in the past 20 days alone.
The decline in prices is attributed to efforts made by cement manufacturers to raise their utilisation levels from below 80,000tpd previously (January and February 2019 respectively) to current levels of above 100,000tpd (as reflected in March 2019 north numbers).
Analysts expect a further reduction of PKR25-30/bag in the next few weeks running towards end of April 2019, taking the closing cement maximum retail price to PKR520-525/bag.
The 3QFY19 results of the cement sector are likely to be below BMA's cement index by seven per cent, due to mixed developments in key driving factors, says BMA Research.
On the supply front, Cherat Cement (CHCC) announced commissioning of its new 2.1Mta cement line during January 2019. In tandem with margins, the overall profitability of the sector is expected to shrink by 24 per cent and 31 per cent QoQ/YoY to PKR5.09bn.
