Pakistan's Topline Research forecasts a significant uptick in cement sales for August 2025, surpassing earlier projections and indicating a strong recovery in demand and pricing.

The report maintains an overweight outlook on Pakistan’s cement sector, highlighting a potential rebound driven by higher-than-anticipated demand. While initial estimates predicted an eight per cent growth in domestic cement dispatches across the northern and southern regions, recent trends suggest the actual figures could be considerably higher.

In July 2025, domestic cement sales rose by 18 per cent YoY, and in the first 17 days of August, growth reached 28 per cent YoY. Overall, domestic sales are projected to grow by 20-25 per cent YoY. The northern regions are currently averaging over 98,000tpd, with working days exceeding 100,000tpd—up from 75,000tpd in August 2024 and 78,000tpd in July 2025. Sales in the southern region are also strong, averaging 18,000tpd (19,000tpd on working days), up from 13,750tpd in August 2024.

This robust domestic demand is attributed to monetary easing, a revival in construction activity, and ongoing infrastructure projects. Additionally, cement prices are expected to stabilise and then rise, supported by sustained demand.

Historically, sales in July and August contribute about 7-8 per cent each to total annual cement sales. Based on this trend, estimates for FY26 suggest domestic sales could reach 42-45Mt, reflecting an increase of 13-20 per cent. This growth would push plant utilisation rates to 52-54 per cent, up from 44 per cent in FY25.

Since peaking at 48Mt in FY21, domestic cement sales in Pakistan have declined, with FY25 sales reaching 37Mt. While current forecasts indicate around eight per cent growth in FY26, the outlook remains cautious until further clarity emerges. Sensitivity analyses on cement stocks and earnings are also incorporated to account for different growth scenarios.

In light of recent demand recovery and reduced coal costs, analysts have elevated their FY26 earnings estimates for the sector by an average of 5–7 per cent.

At a cement industry conference in May 2025, major players including; Lucky Cement, Kohat Cement, Thatta Cement, Attock Cement, Cherat Cement, DG Khan Cement, Pioneer Cement, and Maple Leaf Cement expressed a consensus forecast ranging from three to six per cent growth for FY26. However, recent data suggest that growth could exceed 12 per cent, prompting analysts to maintain their baseline forecast of eight per cent, with possible upside over the next few months.

Price and Input cost outlook
Cement prices are expected to recover in FY26, with retail prices anticipated to increase by PKR50 (US$0.17) per bag in both the north (to PKR1440) and south (to PKR 500), driven by improving demand and utilisation. This gradual price hike is unlikely to hinder demand significantly.

Coal prices have declined to around US$90 per ton in August 2025, compared to US$95 in July and US$100 in FY25, owing to lower duties on local coal, which now trades at PKR35,000-37,000/t. Prices for Afghan coal have also dropped proportionately, further easing input costs for cement producers.

By Abdul Rab Siddiqi, Pakistan