IMS Research and AHL Research have comprehensively reviewed Pakistan's cement industry performance between July and December and forecast how the industry could progress.

According to IMS Research, cement prices have steadily declined over the past few months amid lacklustre domestic demand in the 1HFY24-25 (down 10 per cent YoY) and the industry operating at 45 per cent domestic utilisation levels. 

Cement prices peaked in August 2024 at an average of PKR1530/bag (US$17.8/bag) in the north region but have since dropped by 7.5 per cent, reaching PKR1415/bag. According to industry sources, weak demand during winter and shorter daylight hours has led to increased competition for market share. The disparity in raw material costs between Khyber Pakhtunkhwa and Punjab-based producers has further amplified this pressure.

Experts expect pricing competition among All Pakistan Cement Manufacturers Association (APCMA) members to ease after winter (March onwards) as demand begins to recover, supported by the lag impact of interest rate cuts and the release of gov’t developmental funds in the final quarter of FY24-25.

In this development, AHL Research has stated that cement dispatches for December 2024 saw a two per cent YoY increase, reaching 4.2Mt compared to 4.1Mt in the same period of the previous year. Domestic cement dispatches increased by one per cent MoM to 3.4Mt, marking their highest level since January 2024. Cement dispatches in December 2024 declined by five per cent, YoY, primarily due to seasonal factors and elevated prices from increased FED and royalty charges. Regionally, northern dispatches were down by five per cent YoY to 2.8Mt, while dispatches in the south saw a decline of three per cent YoY to 0.6Mt.

However, exports significantly rose in December, growing by 49 per cent YoY to 0.8Mt. Exports from the southern region increased by 49 per cent YoY to 0.7Mt, while those from the northern region grew by 50 per cent YoY, reaching 0.11Mt compared to 76,000t in the same period last year.

The industry's capacity utilisation rate was 58 per cent in December, with the north region's rate at 51 per cent and the South region's rate at 86 per cent.

By Abdul Rab Siddiqi, Pakistan