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Thursday, February 15, 2024

Cement sales fell by 19pc in July

The market-leading cement sector saw a 19 percent decrease in sales during the month of July due to the monsoon season and Eid Holidays, the All Pakistan Cement Manufacturers Association reported. On the other hand, the coal sector prices remain elevated.

Cement sales in the country saw a decline in the country during the month of July. According to recent data, cement sales went down 12.8 per cent year-on-year and 26 per cent month-on-month.

Cement sector sales dropped by 19.41 percent in July 2021 due to lower construction activity because of the monsoon season and Eid ul Azha holidays, as per data released by APCMA.

According to the data released by the All Pakistan Cement Manufacturers Association (APCMA), local cement despatches in the month of July 2021 were 3.446 million tons showing a substantial decrease of 12.8 percent compared to 3.953 million tons in July 2020.s

Exports also saw a significant decline of 48.9 percent, to 452,776 tons in July 2021 from 885,255 tons in July 2020.

Region-wise, South fared slightly better with an increase of 7%YoY partially due to low
base, while on the other hand, North witnessed a decline of 15% year-on-year.

On the demand side, a major decline in domestic consumption was seen in the northern region where cement sales fell 15.81% to 2.9 million tons.

Sales in the northern part had been 3.4 million tons in July 2020.

In the external trade sector, however, exports from the region increased by 10.42%, rising from 122,823 tons in July 2020 to 135,618 tons in July 2021.

On the other hand, mills in the southern part of the country sold 554,442 tons of cement in the domestic market last month, which was 7.07% higher than the 517,850 tons supplied to retailers in the corresponding month of the previous year.

Coal Sector

In the coal sector, the prices continue to rise since the beginning of the calendar year 2021, with a 49 per cent increase in price to date. The current trading price is $132 per ton against an average of $120 per ton for the preceding month.

AKD Securities analysts believe that taking advantage of high utilization, standing at 81% for 7MCY21, local players have started to pass on the increase in costs with the latest increase of Rs15 per bag taking the total increase in prices in the Northern region to Rs55 per bag over the last 2 months with prices now standing at Rs650-660/bag.

Read More: Pakistan Cement: Highest ever sales for FY21

Analysts believe that the demand for coal is expected to remain elevated in the near term with increased demand from Europe, Japan while supply-side issues continue to persist where China’s trade quarrels with Australia.