Pakistan’s local cement dispatches are likely to increase by 6% year over year but decline by 8% Month over Month, reaching 3.04 million tons in February 2025. Local cement dispatches are expected to rise year over year, supported by the low base effect of February 2024, when sales stood at 2.86 million tons—below the five-year February average of 3.61 million tons.

In our view, the MoM decline in sales is primarily attributed to the lower days. Considering the above sales figures, the sector’s average daily domestic sales are expected to be 108.6k tons/day in February-25, which is lower than the last five-year average February sales of 129.4k tons/day.

Exports during February-25 are anticipated to increase by 15% YoY and fall 22% MoM to 0.46mn tons. Moreover, DGKC and LUCK exports will likely increase 134% YoY and 105% YoY in February-2025.

This takes Pakistan’s total cement sales to around 3.50mn tons in February-2025, up 7% YoY and down 10% MoM.

Total cement capacity utilization in February-25 is estimated to be 51%, compared to 57% in January-25 and 48% in February-24.

In 8MFY25, total cement sales are likely to decrease by around 1% YoY, with local sales expected to decline by 6% YoY while exports are expected to increase by 30% YoY.

According to the Pakistan Bureau of Statistics (PBS), the average retail price in February-25 decreased by PkR 3/bag MoM and PkR 50/bag MoM to PkR 1,381/bag and PkR 1,350/bag in the South and North, respectively.

Outlook:

Local cement demand is expected to recover in FY26 owing to improved fiscal space, easing inflationary pressures, and a lower interest rate. We believe growth in exports will further support total cement dispatches. We expect coal prices to hover around USD 100/ton, citing reduced global demand for the commodity due to environmental concerns.

We maintain our overweight stance on the cement sector, with THCCL, LUCK, FCCL, and MLCF as our top picks.

Courtesy – BMA Research