Pakistan cement sales likely to decline in November

Pakistan cement sales likely to decline in November
Published: 08 December 2010

Pakistan cement dispatches for November 2010 are expected to decline by four per cent YoY to around 2.4Mt compared to 2.5Mt in the same period last year, industry sources told Daily Times. 

The major decline is likely to be seen in exports which fell by nine per cent to 0.7Mt versus 0.77Mt last year, while local dispatches remained flat to 1.7Mt compared to 1.7Mt seen in November 2009.

With these numbers, cement dispatches in 5MFY10 fell by 10 per cent YoY to 12.5Mt compared to 13.9Mt. During the period, exports eroded by 19 percent to 2-year low of 3.9Mt versus 4.8Mt while local dispatches fell by six per cent YoY to 8.6Mt compared to 9.1Mt in same period last year.

“The decline in exports was due to declining sales to Middle East and a complete halt in exports to India amid expiry of BIS certificate (Bureau of Indian Standards) quality assurance certificate from Indian authorities,” Furqan Punjani, an analyst said.

Similarly, slowdown in demand amid recent floods remains the major reason behind decline in local dispatches. 

Analysts expect cement dispatches to improve from 2HFY12 with major contribution from local demand once reconstruction activities begin. 

Floods in Australia, the world’s biggest exporter of coal, have caused production disruptions from the mines in Queensland. This in turn has resulted in an upward pressure on the international coal prices. Coal prices have shot up to US$117/t, (up eight per cent since 1 December) the highest since October 2008. Though the rising prices remain a concern for the local cement manufacturers, analysts have already assumed an average coal price of US$102/t in FY11.