The cement dispatch trend in Pakistan will likely be mixed in September 2023 due to monsoon rain and transport issues, according to Topline Pakistan Research. However, the All Pakistan Cement Manufacturers Association (APCMA) has yet to release official data to support or contradict this scenario. A mixed trend of dispatches was recorded during the first two months of the current financial year.
The research house believes that Pakistan's total cement sales in September 2023 are expected to decline by 5-9 per cent YoY and 10-14 per cent MoM. The decline in sales could be attributed to rains in northern parts of the country, unavailability of transport due to the cultivation of crops and one less working day due to holiday. Considering these figures, the average daily domestic sales for the sector are projected to reach 113,000tpd in September, compared to the five-year average September sales of 124,000tpd.
The start of FY23-24 saw sales lower by 20 per cent MoM in July 2023 due to inclement weather. However, sales rebounded in August 2023 with an MoM increase of 37 per cent to 3.8Mt, attributed to the low base effect.
Exports during September 2023 are anticipated to increase by 21-25 per cent YoY and decline by 17-21 per cent MoM, reaching 0.59Mt, due to reduced coal prices and a significant devaluation of PKR against the dollar.
Cumulative dispatches
In 1QFY23-24 cement sales are expected to increase by around 21-23 per cent YoY, with local sales marking a 15-17 per cent YoY rise. The double-digit sales increase is due to last year's low base effect. Last year the country was affected by floods, which hampered construction activities in July and August.
According to the Pakistan Bureau of Statistics (PBS), the average retail price in September 2023 was PKR1207/bag (US$4.20/bag), up 3.3 per cent MoM in the north and PKR1168/bag (-0.1 per cent MoM) in the south.
Forecast for FY24
Topline expects local cement dispatches to grow by five per cent to 42Mt due to improved farmers' income and economic stability. Exports are also forecast to increase by eight per cent to 5Mt in FY23-24. This takes total cement dispatches to 47Mt, up five per cent YoY.
