Pakistani cement dispatches saw encouraging figures in domestic and overseas markets in August 2023. Usama Rauf, the investment analyst at AKD Securities, stated that cement sales witnessed a significant surge, increasing by 41 per cent and 37 per cent MoM and YoY, respectively, reaching 4.52Mt. This notable increase is primarily attributed to the low base effect, mainly due to the impact of the monsoon season on construction activities. Additionally, the same period last year was heavily impacted by floods in the country. Likewise, in 2MFY23-24, total cement dispatches increased by 45 per cent YoY, totalling 7.7Mt, due to the impacts of floods in the same period last year.

Furthermore, exports show signs of recovery, posting the highest figures since May 2021, as anticipated. This is primarily due to the easing of coal prices and Pakistani rupee devaluation, making exports viable for local cement players.

Export data
Pakistan cement dispatches grew 37 per cent YoY to 4.518Mt in August 2023 from 3.3Mt dispatched in August 2022. The breakdown shows that local cement dispatches by the industry in August 2023 were 3.79Mt compared to 2.901Mt in August 2022, showing an increase of 30.4 per cent. Export dispatches also increased by 87.1 per cent as the volumes grew from 387,440t in August 2022 to 724,777t in August 2023, as per data released by APCMA.

North-south comparison
In August 2023 cement mills based in Pakistan's north dispatched 3.25Mt of cement, showing an increase of 25.3 per cent against 2.6Mt of dispatches in August 2022. Southern-based mills dispatched 1.27Mt of cement in August 2023, which was 80.6 per cent more than the dispatches of 700,436t in August 2022.

Northern-based cement mills dispatched 3.09Mt of cement in domestic markets in August 2023, showing an increase of 23.3 per cent against 2.50Mt in August 2022. Southern-based mills dispatched 704,582t of cement in local markets during August 2023, 74 per cent more than the dispatches of 404,959t during August 2022.

Exports from northern mills increased by 78.5 per cent as volumes surged from 91,963t in August 2022 to 164,195t in August 2023. Exports from the south also increased by 89.7 per cent to 560,582t in August 2023 from 295,477t during the same month last year.

Cumulative dispatches
In the 2MFY23-24 total cement dispatches (domestic and exports) were 7.75Mt, 45.2 per cent higher than the 5.34Mt dispatched last fiscal year. Domestic dispatches during this period were 6.57Mt against 4.8Mt the previous year, showing an increase of 37.1 per cent. Export dispatches also increased 117.13 per cent as the volumes rose to 1.175Mt during the 2MFY23-24 compared to 540,957t of exports during the last fiscal year.

Northern mills dispatched 5.440Mt of cement domestically during the 2MFY23-24, showing an increase of 32 per cent from cement dispatches of 4.121Mt during July-August 2022. Exports from the north increased by 76.3 per cent to 286,009t during July-August 2023 compared with 162,210t exported during the same period last year. Total dispatches by northern mills increased by 33.7 per cent to 5.726Mt during 2MFY23-24 from 4.284Mt in 2MFY22-23.

Domestic dispatches by southern-based mills during July-August 2023 were 1.132Mt, showing an increase of 67.9 per cent over 674,436t of cement dispatched during the last fiscal year. Exports from the south also increased by 134.6 per cent to 888,559t during July-August 2023 compared with 378,747t exported during the previous year. Total dispatches by southern mills increased by 91.9 per cent to 2.021Mt during 2MFY23-24 from 1.053Mt during the last financial year.

Comments of APCMA
All Pakistan Cement Manufacturers Association (APCMA) has pointed out that the Pakistani currency is facing rapid depreciation against the US dollar. Petroleum prices have touched historically high levels, andthe  electricity tariff is also rising. Due to these factors, the cost of production and goods transportation is increasing daily, impacting the price to end consumers. APCMA strongly emphasised that the government should consider these matters to bring the industry out of this serious situation.

Published under Cement News