Cement prices rise to Rs340 per bag

Prices increase in Sindh due to rise in coal rates.

KARACHI: Cement prices in the southern part of the country have increased by Rs10 per 50kg bag. An industry official revealed that the latest price hike has taken average cement prices to Rs340 per bag in Karachi and other cities in Sindh.

However, prices remained unchanged in Punjab, Khyber-Pakhtunkhwa and adjoining areas. “The average price of a cement bag in Punjab is Rs315 to Rs320 right now,” a representative of Pakistan Cement Manufacturers Association told The Express Tribune.

Cement prices have fluctuated rapidly in recent days on the back of surging international prices of coal. On Wednesday, coal prices jumped by about five per cent in international trade to reach $138.5 per ton.

Manufacturers have also blamed higher cost of transportation and electricity for successive increases in prices of the building material. Resultantly, prices have rallied from about Rs280 per bag in January 2010 to the current level of Rs340 per bag. Demand for cement is usually relatively low in winter months. Cement sector analysts point out that although demand would likely increase in coming months, domestic economic growth has faltered.

Runaway inflation has limited the ability of the State Bank of Pakistan to reduce interest rates. Analysts point out that while the cost of borrowing remains high, major construction and development projects in the country are unlikely to gather momentum. However, lower production limits the efficiency of cement manufacturers and as such teetering demand will likely keep cement prices higher.

Published in The Express Tribune, January 20^th,  2011.