Provisional cement data for the month of Jan’22 depicts a decline of 19% YoY to 3.85mn tons whereby domestic dispatches recorded a dip of 18% YoY to 3.32mn tons led primarily by slow down in construction activity as the economy consolidates, end of construction package (expiry date: 31st Dec’21) as well as augmented interest rates.

Meanwhile, exports shrunk by 24% YoY during Jan’22 to 0.53mn tons due to a decline in North-based exports to Afghanistan by 95% YoY to 0.01mn tons which offset the 12% growth in South-based exports of 0.52mn tons.

A similar trend was witnessed on a MoM basis; total dispatches depicted a downturn of 16% whereby local offtake underwent a plummet of 18% on account of winter season and rains across the country which curtailed construction activity, whereas exports went down slightly by 2% MoM. This took the 7MFY22 dispatches to 31.30mn tons (down by 6% YoY) given a 1% YoY cut in domestic offtake to 27.38mn tons as the government / SBP roll back incentives offered during initial COVID outbreak.

Meanwhile exports too have continued to underperform; 31% YoY decline during 7MFY22 attributable to slow down in sea-based exports to Bangladesh and Sri Lanka together with liquidity issues in the neighbouring Afghan market eroding exports from Pakistan.

Further dissection revealed that deterioration in North during 7MFY22 arrived at 6% YoY to 23.37mn tons with local offtake compressing by 3% YoY to 22.81mn tons amid weak demand ensuing from construction activity, while exports dwindled by a significant 62% YoY to 0.55mn tons. Whereas South-based dispatches underwent a reduction of 5% YoY owed to a 21% slow down in exports. However, domestic demand in the local South market remains shielded, growing by 11% YoY in 7MFY22 to 4.57mn tons, as many housing projects remain on track.

Courtesy – AHL Research