Cement sales in Pakistan likely to drop in Dec 2021

News Report

Local cement sales in Pakistan are likely to decline by 4-8% year on year (YoY) in December 2021. The local sales in the first half of 2022 are also likely to drop 2% year on a year (YoY) basis.

Pakistan’s cement sales in Dec-2021 are likely to reach 4.3-4.7 million tons, down 5-9% YoY. On an MoM basis, the cement sales are also likely to drop by 5-9% MoM.

Local sales are likely to drop in Pakistan by 4-8% YoY amid a slowdown in construction activity, rising construction cost, and the conclusion of the amnesty scheme, Topline Research said in a note.

Pakistan Cement Sales up in Nov

However, it further said that exports are likely to drop by 8-12% YoY because of higher freight costs, port congestion, and a slowdown in world economies.

Local sales are estimated to decline by 3-7% MoM, wherein average daily sales in the North and South regions are hovering at 103000-107,000 tons/day and 20,000-24,000 tons per day, respectively.

This decline is likely due to seasonal factors where we see a slowdown in cement sales on the onset of the winter season and a slowdown in construction activities.

Exports are likely to witness a decline by 16-20% MoM.

In 1HFY22, total sales are estimated to clock in at around 27.3mn tons, slightly down by 2% YoY. Local sales are likely to remain flat in 1HFY22.

Industry’s capacity utilization based on local sales may reach 68% in December 2021.

In the North region, the utilization is likely to be 71%.  However, the overall capacity utilization (including exports) may reach 78%.

Looking at the total sales in 1HFY22, capacity utilization may clock in at 79%, whereas based on local sales the same is likely to be around 69%.

Cement retail prices in December 2021 averaged at Rs723 per bag in the North, which remained flat from November 2021. In the South, retail prices increased by Rs14/bag MoM on an average in December 2021 to Rs763 per bag.