Cement dispatches show mixed trend in January

The All Pakistan Cement Manufacturers Associations (APCMA) is yet to issue January 2024 cement dispatches data about local consumption and export. However, Topline Pakistan Research has forecast that Pakistan total cement sales in January 2024 will decline by 14-18 per cent YoY and MoM to reach 3.4Mt. 

According to a report, local cement dispatches are likely to fall by 15-19 per cent YoY and MoM to total 2.9Mt, primarily due to a slowdown in construction activities due to higher cost of construction inputs, high base effect of last year (when cement dispatches began rising after floods), and the implementation of axle load, as companies were facing issues on cement transport.

Export
Exports during January 2024 are anticipated to increase by 3-7 per cent YoY, reaching 0.44Mt amid reduced coal prices and the devaluation of Pakistani rupee against the US dollar, making exports more viable. Total cement capacity utilisation in January 2024 is estimated at 51 per cent versus 62 per cent in December 2023 and 65 per cent in January 2023.

Cumulative data
In the 7MFY23-24, total cement sales are likely to increase by around 4-8 per cent YoY, with local sales expected to decline by 1-3 per cent YoY and exports to increase by 88-92 per cent YoY.

Average retail price in January 2024 remained flattish at PKR1190/bag (US$4.25) in the south, while it fall by PKR28/bag to PKR1239/bag in the north, as per Pakistan Bureau of Statistics (PBS). During November 2023 cement players increased cement prices by PKR50-80/bag to pass on the impact of axle load.

Analyst expect local sales to remain under pressure due to the implementation of axle load regulations, while  export sales will continue their momentum. The research house expects total cement dispatches to total 48.5Mt, up eight per cent YoY in FY23-24.