Pakistan’s local cement dispatches will likely increase by 3% Month over Month to 2.99mn tons in October 2024. Dispatches are anticipated to decline by 9% year over year. Our analysis is based on the provisional numbers for 20 days, wherein local sales stand at 1.93mn tons.
According to channel checks, § MoM increase in local cement dispatches is due to seasonal recovery post-monsoon and government-led construction activity (especially in the South). Oct-2024 sales are likely to be 2.99mn tons compared to the 1QFY25 average of 2.71mn tons.
§ Considering the above sales figures, the average daily domestic sales for the sector are expected to clock in at 96.5k tons/day in Oct-24, which is lower than the Oct-23 average of 106k tons/day.
§ YoY decline in local cement dispatches is attributed to (i) a slowdown in construction activities due to the higher cost of construction inputs and (ii) 24% and 17% higher YoY cement bag prices in North and South, according to PBS data.
§ Despite bag prices increasing by Rs65-75 due to increased royalties in Punjab, channel checks show no instances of intra-provincial dumping. On September 24, talks also started between different stakeholders regarding the discrepancy in royalty created in Punjab.
§ Exports during Oct 2024 are anticipated to increase by 15% MoM and 58% YoY. DGKC exports are likely to be up by 14% MoM, while LUCK and ACPL exports will likely be up by 12% and 35% MoM, respectively.
§ This would bring Pakistan’s total cement sales to around 4.12mn tons in October 2024, up 3% year over year and 6% Month over Month.
§ Total cement capacity utilization in Oct-24 is estimated to clock in at 60% vs 57% in Sep-24 and 58% in Oct-23.
§ In 4MFY25, total cement sales are likely to decrease by around 9% YoY, with local sales expected to decline by 17% YoY and exports to increase by 33% YoY.
§ Average retail price in Oct-24 decreased by 1% MoM in the North and stayed flat in the South, per the Pakistan Bureau of Statistics (PBS).
Courtesy – Topline Pakistan Research
