Pakistan cement sales in August 2011 fell to 2.4Mt, down 18% MoM and witnessed the sharpest MoM contraction in 21 months since September 2010.
Heavy rainfalls in the country along with fewer working hours during Ramadan were the key reasons for this decline. Domestic demand stood at 1.6Mt (down 19% MoM) while exports slipped 714,000t (down 14% MoM). However, last year’s previous low base on account of flooding helped total cement sales in the first two months of the current fiscal to record a seven per cent YoY rise (5.2Mt).
The decline in local sales were led by steep falls in the southern part of the country where sales were down 38% MoM. For 2MFY12, domestic sales reached 3.7Mt, up 14% YoY, which is again attributable to last year’s low base.
Logistical issues were hindered by sales to Afghanistan (down 26% MoM). This takes exports for 2MFY12 to 1.5Mt, down seven per cent on last year’s sales of 1.7Mt. On the other hand, local prices increased to PKR290/bag (retail prices are around PKR410-420/bag) from last month’s average of PKR251/bag as rises in power costs have been passed on by manufacturers. Export prices have also gained some ground rising to US$60/t from a recent average of US$52-55/t.
Analysts expect domestic demand to reach 23.3Mt this year (up six per cent YoY) while exports are forecast to remain in the region of 9.5Mt.