The cement data for the upcoming month of May’24 is expected to reveal a significant rise of 1.4% YoY in dispatches, settling at 4.0mn tons. This projection, when compared to the same period last year, indicates a promising trend in the cement sector.
The projection for domestic dispatches is a cause for concern, as it is expected to decline by 10.2% YoY, arriving at 3.1mn tons. This decrease can be attributed to weakened demand, primarily influenced by elevated inflation and the all-time high policy rate. Local dispatches of the north are anticipated to record at 2.5mn tons, a dip of 10.8% YoY, whereas local dispatches in the south are forecasted to experience a drop of 7.4% YoY, settling at 0.6mn tons.
On a more positive note, exports are expected to surge by 76.2% YoY during May’24 to 0.94mn tons, the highest level in 44 months. This significant increase in exports, especially from the south, is a promising sign for the cement sector.
Total dispatches for May’24 are expected to increase by 36.3% MoM. In Apr’24 dispatches were lower amid Eid holidays. On MoM basis the total domestic dispatches are anticipated to soar by 31.9%. The domestic offtake by south is forecasted to rise 56.3% MoM, whereas north to increase by 27.0% MoM.
Utilization of the industry clocked in at 42.36% in Apr’24. In the same period, utilization of the North region settled at 37.20% while, south region utilization clocked in at 63.74%.
This is expected to take 11MFY24 offtake to 41.5mn tons (+2.4% YoY), primarily attributable to increase in exports by 66.8% YoY. Local dispatches are projected to decline, recording at 34.8mn tons, drop of 4.7% YoY, as compared to SPLY.
In 11MFY24 south-based dispatches are anticipated to climb at 11.5mn tons, up 19.6% YoY, given 76.5% YoY rise in exports. Nevertheless, local dispatches in south are to fall by 6.4%, YoY recording at 6.18mn tons.
North-based dispatches are expected to dwindle by 3% YoY in 11MFY24 settling 29.9mn tons, owing to 4.3% YoY decline in local dispatches. On the other hand, exports are expected to arrive at 1.3mn, up by 37% YoY.
Courtesy – AHL Research
