Pakistan dispatched a 2.039Mt of cement during July 2022, down 47.7 per cent from 3.899Mt during the same month of the last fiscal year.

According to the data released by the APCMA, local cement dispatches by the industry during July 2022 were 1.88Mt compared to 3.44Mt in July 2021, showing a decline of 45.3 per cent. Export dispatches also suffered a massive decrease of 66.1 per cent as the volumes reduced from 452,777t in July 2021 to 153,517t in July 2022.

As a result, capacity utilisation in July was estimated at around 35 per cent, down from 67 per cent in July 2021.

North and south comparison
In July 2022 northern-based cement mills dispatched 1.68Mt cement, showing a decline of 44.3 per cent against 3.02Mt dispatches in July 2021. Southern-based mills dispatched 352,747t of cement during July 2022, 59.5 per cent less than the dispatches of 871,601t during July 2021.

Northern-based cement mills dispatched 1.61Mt cement in domestic markets, showing a decline of 44.11 per cent against 2.89Mt dispatches in July 2021. Southern-based mills delivered 269,477t cement in local markets during July 2022, which was 51.4 per cent less than the dispatches of 554,442t during July 2021.

Exports from northern-based mills declined by 48.2 per cent as the volumes decreased from 135,618t in July 2021 to 70,247t in July 2022. Exports from the south fell by 73.8 per cent to 83,270t in July 2022 from 317,159t during the same month last year.

Impacting factors and outlook
A representative of the All Pakistan Cement Manufacturers Association (APCMA) highlighted that the considerable currency devaluation, political uncertainty and a deteriorating economy need to be addressed by the government to provide a stable industry environment.

Mehroz Khan of Top Line Securities attributed the fall in sales in July to the slowdown in the construction activity due to inclement weather combined with higher construction costs. He added that cement prices are hovering around PKR1050 (US$4.55)/50kg bag, up 20 per cent from PKR875/bag in May as a result of the rupee depreciation against the US dollar, as well as higher fuel and coal prices. For example, Afghan ex-works coal prices saw a 33 per cent hike to PKR66,000/t as the Afghan government raised ex-min prices and export taxes.

Mr Khan expects cement dispatches to remain under pressure in FY22-23 due to a forecast slowdown in economic growth, rising interest rates and acontained Public Sector Development Programme.