Pakistan’s local cement dispatches will likely be down 19-21% YoY and 16-18% MoM to clock in at around 2.78mn tons in June 2024. Local cement dispatches on a YoY basis are down due to (i) a slowdown in construction activities courtesy of the higher cost of construction, (ii) the high base effect of last year due to flood-related rehabilitation activities, and (iii) the implementation of axle load. However, APCMA has yet to announce the data. Furthermore, the MoM decline is due to fewer working days amid the Eid holidays.

Considering the above sales figures, the sector’s average daily domestic sales are expected to be 92.6k tons/day on June 24, lower than the last five-year average June sales of 134.5k tons/day.

Exports during June 24 are anticipated to decline by 14-16% YoY and 46-48% MoM to stand at 0.49mn tons. This decline is primarily attributed to reduced working days and an unusually high export volume in the previous month, including additional exports by Lucky Cement (LUCK) and D.G Khan Cement (DGKC).

This brings Pakistan’s total cement sales to around 3.27 million tons in June 2024, down 19-21% year over year and 23-25% Month over Month.

Total cement capacity utilisation in June 24 is estimated to be 48%, compared to 62% in May 24 and 66% in June 23.

In FY24, total cement sales will likely increase by around 1-3% YoY, with local sales expected to decline by 4-6% YoY and exports to increase by 55-57% YoY.

According to the Pakistan Bureau of Statistics (PBS), the average retail price on June 24 increased by PkR 37/bag YoY and PkR 168/bag YoY to PkR 1,202/bag and PkR 1,295/bag in the South and North, respectively.

It is important to highlight that cement players in the North have raised cement prices by PkR 70-100 per bag since mid-May 2024. Moreover, cement players in the South have also raised cement prices by PkR 10 per bag.

Courtesy – BMA Capital Management Ltd.