Daily Times

Cement dispatches for the month of June 2018 registered a stable growth of 3 percent year-on-year (YoY) to clock in at 2.81 million tons as against 2.73 million tons in the similar month last year.

Cumulatively, this brings Fiscal Year 2017-18 (FY18) dispatches to 45.72 million tons in contrast to 40.32 million tons in FY17, marking a rise of 13 percent YoY.

Cement dispatches declined by 28 percent Month-on-Month (MoM) on account of benign construction following Ramadan and festive holidays.

On a sequential basis, a considerable fall of 28 percent MoM was witnessed too, largely accredited to benign construction activities in the holy month of Ramadan and festive holidays following it, IGI Finex Securities’ research report said.

Bestway Cement and Lucky cement led the volumetric chart of market share, as determined by the capacity available to each player, continued to be led by Bestway Cement Limited (BWCL) with Lucky Cement Limited (LUCK) playing second fiddle. Conversely, with respect to growth in dispatches, Attock Cement Pakistan

Limited (ACPL) spearheaded the volumetric chart with a significant 35 percent YoY growth attributed to greater exports achieved on account of enhanced capacity.

As per the weekly data published by Pakistan Bureau of Statistics (PBS), cement prices across the country rose by 2 percent MoM to clock in at an average national price of Rs 561/bag as opposed to Rs 547/bag in May-18.

“We view this rise in prices as an effort by industry players to pass over the impact of enhanced FED promulgated through Finance Act 2018-19. The industry players’ unison with respect to prices given expansions coming online in both geographical spheres of the country marks a positive sign for the sector as a whole”, an analyst at IGI Research said.

The recent rally in global oil prices has had a chain effect on global commodity prices. This coupled with enhanced demand triggered from India and restricted coal production from China has pushed prices of coal above the two digit mark for the last couple of months.

“With Eid holidays over, the construction industry is back on track and as such we expect resumption of dispatches figures in the month of July 2018. Looking ahead, we expect the overall demand to remain stable in FY19 ascribed to commencement of major CPEC projects therein and continuation of high levels of PSDP allocations to achieve GDP targets set by the government. Simultaneously, private demand is also expected to rise following attractive tax measures adopted for facilitation of Pakistan Mortgage Refinance Company which is expected to provide fixed and attractive mortgage rates for private house building across the country”, added the report.

Published in Daily Times, June 30^th 2018.