KARACHI: The local cement sales dropped 16 per cent year-on-year to 3.4 million tonnes followed by a 21pc fall in exports to 551,006 tonnes in January.
All Pakistan Cement Manufacturers Association (APCMA) spokesman on Wednesday said that slowdown in the construction activities for public sector development projects amid unfavourable weather conditions is one of the key causes of lower domestic consumption of cement.
He said the huge fall in exports is a matter of concern for the government too as it is negatively impacting the much-needed foreign exchange for the country.
“One of the main reasons for low exports via sea is the shortage of containers while an increase in demand for containers has resulted in rising freight cost of containers from $500 to $1,500, making the Pakistani cement uncompetitive in the international market,” he said.
The overall cement sales (local and exports) shrank 16.6pc year-on-year to 3.95m tonnes. He said the cement industry was already under pressure due to a sharp increase in the production cost that includes global coal prices, high power tariffs and transportation.
As per the APCMA data, the North-based mills despatched 2.7m tonnes in the domestic market, down 18pc from 3.313m tonnes a year ago. Exports fell by 94.12pc to 13,727 tonnes from 233,404 tonnes.
The South-based mills sold 4.82pc less cement in the domestic markets to 693,453 tonnes as against 728,568 tonnes in January 2021, while exports surged by 16.41pc to 537,279 tonnes. However, local sales recorded an uptick 0.69pc to 27.465m tonnes in 7MFY22, while exports plunged 31pc to 3.94m tonnes from 5.71m tonnes in 7MFY21.
Total cement sales (local and exports) stood at 31.4m tonnes in 7MFY22, a drop of 6pc over 33.37m tonnes in the same period last year.
North-based mills despatched 22.87m tonnes domestically during the 7MFY22, a fall of 3pc from 23.54m tonnes in 7MFY21. Exports from the same zone plummeted by 61.39pc to 557,615 tonnes in 7MFY22 against 1.444m tonnes in the same period last year.
Domestic despatches by South-based mills during July-January 2022 were 4.59m tonnes, up by 11.67pc over 4.115m tonnes in 7MFY21. Exports plunged by 21pc to 3.384m tonnes from 4.272m tonnes in 7MFY21.
According to Mehroz Khan of Topline Securities, the cement industry has partially passed on the cost impact whereas average cement prices in North during 2QFY22 increased to Rs723 per 50 kg bag versus Rs659 in the IQFY22 while the average cement price in the South rose to Rs745 from Rs680 in the same period.
Published in Dawn, February 3rd, 2022
