BMA Capital Management Ltd. has analysed the Pakistan Cement Sector and forecasts that local cement dispatches will drop by 16% year-on-year (YoY) in June 2025. Specifically, local cement dispatches are projected to decline by 16% YoY and 29% month-on-month (MoM), reaching 2.60 million tons in June 2025.
The year-on-year decrease in local cement dispatches is attributed to (i) higher construction costs and (ii) limited government spending on infrastructure projects. The month-on-month sales decline is primarily due to the Eid holidays.
Given these sales figures, the average daily domestic sales for the sector are expected to reach 83,900 tons per day in June 2025, which is lower than the five-year average for June of 133,700 tons per day.
On the export front, June 2025 is anticipated to see a significant increase of 93% YoY, though there will be a decrease of 8% MoM, bringing exports to 0.91 million tons. Notably, companies such as POWER, ACPL, and BWCL are projected to experience substantial increases in their exports, with expected YoY growth rates of 532%, 394%, and 306%, respectively.
As a result, total cement sales in Pakistan are estimated to be around 3.52 million tons in June 2025, representing a slight decline of 1% YoY and a more pronounced drop of 24% MoM. Total cement capacity utilisation is estimated at 52% for June 2025, down from 68% in May 2025 and 53% in June 2024.
For the fiscal year 2025 (FY25), total cement sales are expected to increase by just 2% YoY. While local sales are projected to decline by 3% YoY, exports are expected to rise by 30% YoY. According to the Pakistan Bureau of Statistics (PBS), the average retail price of cement in June 2025 increased by PKR 19 per bag in the South, while it decreased by PKR 42 per bag in the North, with prices standing at PKR 1,448 per bag in the South and PKR 1,372 per bag in the North.
Outlook: Local cement demand is expected to recover in FY26 due to improved fiscal conditions, easing inflationary pressures, and lower interest rates. We believe that growth in exports will further support total cement dispatches.
We expect coal prices to stabilise around [placeholder]/ton, influenced by reduced global demand for the commodity due to environmental concerns. We maintain an overweight stance on the cement sector, with LUCK, FCCL, and MLCF as our top picks.
Courtesy – BMA Capital Management Ltd
