Cement Prices to go up further by Rs 200 pre bag
News Report
Islamabad: The cement prices are likely to go up further by Rs 200 per bag in the retail market due to higher coal prices.
According to the report, the retail price of cement per bag has risen by Rs160 in the last 60 days from Jan 15.
It may further go up by Rs200 in the next 30 days.
Muhammad Wasiq, a renowned cement dealer in Lahore said that the bag price has risen from Rs690 in January to Rs850 currently.
If the coal supply issue continues, he added it could reach Rs1,050.
There are 25 cement factories in the north and south of the country that can supply the demand.
Industry players say that electricity and coal account for roughly 50-65% of total cement production costs.
Traders had to stop importing coal from South Africa, Indonesia, Ukraine, and other western countries due to the high price of coal reaching $500 per ton.
Then the price began to fall. But $375 a tonne was still too much.
The price per ton coal was only $35 in 2003,” he remarked.
Earlier, the cement manufacturers had increased increase prices of cement by Rs 25 per bag.
The prices of coal in the international market have jumped up to a record level. They cause an emergency in different countries like China and India.
The hike in coal prices is also going to impact the cement sector that is likely to increase costs up to Rs 70-75 per bag to sustain margins.
Sherman Research, in its report, had assumed an average coal inventory of US$165 per ton in 2QFY22.
It predicted cement prices would go up to the tune of Rs70-75/bag to sustain gross margins.
The report said that manufacturers would have to increase cement price by Rs25/bag in next week.
However, they will make a further increase of Rs50 per bag during Nov-Dec 2021. The cost of coal makes around 45-50% of overall cement production costs.
Lucky Cement had already increased the prices of cement by Rs 25 per bag effective from October 5, 2021.
During the month of August, the despatches increased by 22.7 percent. Cement prices are likely to go up by Rs50/bag in Karachi from next week. Cement Despatches were up by 22.77 percent during August 2021.
The cement sector had recorded a growth of 22.77 % in August 2021. Total Cement despatches during August 2021 stood at 4.336 million tons compared to 3.531 million tons during the same month of last fiscal year.
Exports
However, exports declined from 726,687 tons in August 2020 to 521,468 tons in August 2021, showing a reduction of 28.24 percent.
The North-based cement mills had registered 3.141 million tons of cement despatches in domestic markets, up 25.42 percent over 2.504 million tons compared to the same period last year.
South-based mills recorded 673,572 tons despatches of cement in local markets, up almost 124% against despatches of 300,750 tons in August 2020.
