Pakistan will close ongoing financial year with negligible cement dispatch growth

All Pakistan Cement Manufacturers Association (APCMA) is yet to present dispatch data for June 2024 and 12 months' data (July 2023-June 2024). Topline Pakistan Research has estimated that the country would end up with total cement sales by negligible growth through local and overseers dispatches during this reporting period.

June 2024
Pakistan's total cement sales are approximately 3.28Mt in June 2024, down 19 per cent YoY and 24 per cent MoM.

The country's domestic cement dispatches are expected to be down by 18 per cent MoM and 21 per cent YoY to 2.76Mt. The MoM decrease in local cement dispatches is primarily due to fewer working days in June 2024 as a result of the Eid holidays. Sales in May 2024 were higher due to post-Ramadan seasonal demand. Sales in May 2024 stood at 3.36Mt compared to the monthly average of 3.19Mt in 11MFY23-24.The YoY decline in local cement dispatches is attributed to a slowdown in construction activities due to the higher cost of construction inputs and 13 per cent and seven per cent higher YoY cement bag prices in the north and south.

Exports in June 2024 are anticipated to decrease by 45 per cent MoM and by 11 per cent YoY. The MoM decrease is due to the impact of the Eid holidays, and the YoY decline is due to lower demand from international markets and lower clinker sales in June.

Total cement capacity utilisation in June 2024 is estimated to be 48 per cent, compared to 62 per cent in May 2024 and 66 per cent in June 2023.

According to the Pakistan Bureau of Statistics (PBS), the average retail price in June 2024 increased by four per cent MoM in the north and remained almost unchanged in the south.

FY23-24 outlook
In FY23-24 total cement sales are likely to increase by around one per cent YoY, with domestic sales expected to decline by five per cent YoY and exports to increase by 57 per cent YoY. This would be the first time in the last 30+ years that local cement sales have declined for three consecutive years. The forecast decline in the domestic market has been attributed to higher construction costs, bag prices and lower government spending from development funds. The increase in export sales is supported by lower coal prices and freight charges.