LAHORE:
Local cement dispatches across Pakistan are projected to increase by 10% to 14% for March 2024. Total dispatches are expected to reach around 3.20 million tonnes on a month-on-month (MoM) basis, with a projected decline of 3% to 7% on a year-on-year (YoY) basis.
In February 2024, cement sales remained low, primarily due to the election month, during which every sector anxiously awaited the election process and its results. Local cement dispatches in February 2024 were 2.86 million tonnes compared to the five-year average dispatches of 3.61 million tonnes in February.
Based on these sales figures, the average daily domestic sales for the sector are expected to reach 103.1 thousand tonnes/day in March 2024, which is still lower than the five-year average March sales of 127.1 thousand tonnes/day. The YoY decline in local cement dispatches is attributed to a slowdown in construction activities due to higher construction input costs and the high base effect of the previous year, when cement dispatches increased due to flood-related construction activities. The implementation of axle load regulations, which caused issues in transporting cement, was another reason for declining cement dispatches.
Read Cement dispatches decline 19.22%
Exports during March 2024 are anticipated to increase by 25-29% YoY and 39-43% MoM, reaching 0.56 million tonnes. This growth in exports is mainly attributed to Lucky Cement, as the company recently secured export orders mostly from African countries. This brings Pakistan’s total cement sales to around 3.75 million tonnes in March 2024, remaining flat YoY and increasing by 13-17% MoM.
Total cement capacity utilisation in March 2024 is estimated to be 55%, compared to 48% in February 2024 and 61% in March 2023.
In the first nine months of FY24, total cement sales are likely to increase by around 1-3% YoY, with local sales expected to decline by 3-5% YoY and exports to increase by 66-68% YoY. The average retail price in March 2024 increased by Rs10 per bag to Rs1,205 per bag in the South, while it decreased by Rs6 per bag to Rs1,239 per bag in the North, according to the Pakistan Bureau of Statistics (PBS).
“Based on 9M2023 cement sales, we expect local sales to remain flat YoY at 40 million tonnes, down from our earlier estimate of 5% growth in FY24, while we believe export sales will continue their momentum. Consequently, we expect total cement dispatches to clock in at 47 million tons, up 5% YoY in FY24,” said Topline Securities in its report.
Published in The Express Tribune, March 27th, 2024.
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