Pakistan cement prices rise amid strong rains

Pakistan cement prices rise amid strong rains
Published: 28 June 2007

Two Pakistan cement companies have raised prices of their products during the last few days despite sluggish demand, said dealers.

They said that Dadabhoy Cement has raised the price of ordinary Portland cement to Rs232 per 50kg bag from Rs 222-224. Lucky Cement, the largest producer of cement in the country, pushed its price to Rs240 from Rs238 the other day.

Dealers said the cement companies have been raising their prices by small amounts in the recent months. The price raise comes despite a slowdown in construction activities due to rains, which has caused the demand for cement to nosedive.

The cement companies earn Rs40-50 per bag. It is pertinent to mention here that the cement manufacturing companies had enhanced their prices in early February this year after creating an impression of supply shortage due to increased exports. However, they had to bring their prices gradually down after contractors and builders registered strong protests.

The cement-makers increase the prices in summer to meet the demand, as the construction activity peaks during this time of the year. Construction activities are stopped in winter and slowed in monsoon season. It is thus expected that the cement companies will have to reduce their prices in the days to come, when the monsoon rains strike with full force, as forecast by the Meteorological Department.

Last year in early summer the cement-makers had taken the prices to as high as Rs 400 per bag. However, with the new plants starting production, there was a supply glut in the market, which caused the prices to tumble. The cement makers then found themselves in a difficult position, as they had to sell as low as Rs 170 per bag in later part of the last year.