Pakistan cement prices ease amid ample supply, low demand

Pakistan cement prices ease amid ample supply, low demand
Published: 24 October 2006

Cement prices in Pakistan have come down in the recent weeks, as the production of the local manufacturers has exceeded the demand in the local market. That is also the reason the export of cement has risen to record levels.

Locally manufactured cement is now selling at prices as low as Rs240-250 per bag. In March and April this year the prices had risen as high as Rs400 per bag, which had forced the government to allow import of cement and grant subsidy thereon.

Even after the imported cement arrived in the country, local manufacturers were adamant and did not reduce their prices below Rs285-290. However, now that the leading manufacturers have expanded their production capacity and there is a glut in the market, most of the producers have had to cut prices.

Falcon is selling at Rs315 per 50-kg bag, Pakland at Rs303, Javedan at Rs290, Thatta at Rs283, Lucky at Rs271, Power at Rs255, Dadabhoy at Rs255. The manufacturing units in Punjab were mostly selling at very low prices. A trader said the units in Sindh would also have to bring prices down by at least Rs30 after Eid because of inflow of low-priced cement from Punjab. Ex-factory price in Punjab is as low as Rs170 per bag, which is easily available to buyers in Sindh at Rs240.

On the other hand, sources said, no one is willing to buy imported cement, which is lying in warehouses in large quantities. A trader said around 0.6-0.7 million bags of imported cement were lying in warehouses and nobody in the market was interested in buying that stuff.

It is believed the local manufacturers had contrived with the government officials to get the consignments of cement withheld at the ports on pretexts of inferior quality. That may well have been the factor behind the people’s unwillingness to buy that cement after authorities released it on clearance from reputed laboratories of the country. Its quality remains doubtful even after clearance by the public sector laboratories.

However, the cement prices may go up in the future if the government implements its decision of using cement in construction of roads. So far the government has not finalized any practical plan despite a decision taken by the Economic Coordination Committee (ECC) of the Federal Cabinet in this respect.

Officials of cement-making companies claim the roads constructed with cement do not need any costly repair for 30 to 35 years after their construction. They say that cement is used in various mega road projects around the world both in developing and the developed countries.