Pakistan’s cement dispatches (ie, local sales plus exports including clinker) over the 5MFY23-24 period (July-November 2023) indicate total dispatches of 47Mt for the full fiscal year. If all goes well, this will translate into a capacity utilisation level of approximately 57 per cent.

According to local media, this rate is low compared to the previous fiscal and substantially lower than in previous years when utilisation reached maximum levels, pushing cement manufacturers to invest in capacity expansion projects. 

Low utilisation typically leads to price competition. However, local cement producers have not relented to such pressures and maintained – and indeed raised – price levels whenever possible in agreement, which is an industry norm. 

Last week, cement prices were raised by an average of PKR33/bag (US$0.12). In some markets the increase was noted to be PKR60-80/bag due to the implementation of the axle load regime on Pakistan’s motorways and highways, which has been pushing transport costs by roughly 40 per cent.

Exports propel dispatch growth
Overall in the 5MFY24, total cement dispatches advanced by 11 per cent YoY. The growth has been propelled uncharacteristically by vibrant exports, which have benefitted from low coal prices and the depreciation of the Pakistan rupee which has made them more competitive on the international market.  On the other hand, domestic sales showed only nominal growth of two per cent over the five-month period.