Local cement sales fall 17pc in January

Published February 3, 2024
Total cement despatches are expected to rise by 8pc to 48.5m tonnes in entire FY24.—Dawn/file
Total cement despatches are expected to rise by 8pc to 48.5m tonnes in entire FY24.—Dawn/file

KARACHI: Local cement sales plunged 17.30 per cent to 2.967 million tonnes year-on-year during the first month of 2024 due to a winter-driven construction slowdown, higher cost of key materials and transportation issues after the implementation of a new axle load management regime.

However, cement exports increased 7pc to 446,559 tonnes in January from 418,067 tonnes in the same month last year, data released by the All Pakistan Cement Manufacturers Association (APCMA) said.

APCMA spokesperson said the new axle load regime has significantly reduced the loading capacity of vehicles leading to operational inefficiencies and increased inland transportation costs as well as freight, handling and shipping charges for export consignments.

“All these factors will put pressure on cement prices likely to result in high costs to the domestic consumers and adverse effects on the exports,” he stressed.

Exports almost double to 4.1m tonnes in 7MFY24

The association has repeatedly requested the government to review the new axle load regulations to address the industry’s genuine concerns on a priority, he added.

Fahah Hussain Khan of Topline Securities linked rising cement exports to a reduction in coal price and the rupee devaluation against the dollar, making exports more viable.

The cumulative cement despatches (local and export) dropped 15pc to 3.414m tonnes in January from 4m tonnes in the same period last year.

During 7MFY24, a drop of 2pc was registered in domestic sales to 23.196m tonnes from 23.618m tonnes in the same period last year. Exports showed a healthy growth of 90pc to 4.1m tonnes from 2.152m tonnes.

As a result, total cement despatches (domestic and exports) were 27.296m tonnes which is 6pc higher than 25.77m tonnes despatched during the corresponding period of last year.

The average retail price in January remained flat at Rs1,190 per 50kg bag in the south, while it fell by Rs28 per bag to Rs1,239 in the north, as per the Pakistan Bureau of Statistics.

During November 2023, cement makers increased cement prices by Rs50-80 per bag to pass on the impact of axle load. Mr Fahad said local sales are likely to remain under pressure due to the implementation of axle load regulations, while exports would continue their momentum.

Published in Dawn, February 3rd, 2024

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