Ramzan, an extended Eid break and an economic slowdown affected cement sales in April.

Pakistan’s total cement sales in Apr-2023 are expected to fall by 25-29% MoM to clock in at 2.7-2.9mn tons, with local dispatches likely to be down by 28-32% MoM due to Eid holidays, economic slowdown and muted construction activity during Ramadan.

Total cement dispatches in Apr-2023 are expected to decrease by around 19-23% on a YoY basis, with local dispatches likely to be down by 28-32% mainly due to (1) severe hike in interest rates, (2) increasing cost of construction and (3) political instability discouraging investors in the construction sector.

In 10MFY23, industry cement sales are expected to fall by 18% YoY with local sales posting a decline of 17% YoY.

Exports during Apr-2023 will likely increase by 175% YoY and decline by 2% MoM to clock in at 0.43mn tons. In 10MFY23, export sales are expected to decline 26-30% YoY due to the global economic slowdown and uncompetitive export prices due to higher domestic production costs.

Industry utilisation during Apr-2023 is anticipated to clock in at 44%, with a 10MFY23 average of around 58%.

This takes average daily sales in the North and South regions to 85k tons/day and 18k tons/day, respectively.

As per the Pakistan Bureau of Statics (PBS), Cement retail prices in Apr-2023 averaged Rs1,102/bag in the North, a minor increase from Mar-2023. In the South, average cement prices clocked in at Rs1,166/bag, with an increase of Rs8/bag from Mar-2023.

Courtesy- Topline Securities

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