Cement sales fall as input cost rises

Surging coal rates, increase in energy tariffs and oil prices perturb industry

LAHORE:

Cement sales dropped 12.17% to 4.589 million tons in September 2021 as compared to 5.225 million tons in the same month of previous year, showed data released by the All Pakistan Cement Manufacturers Association (APCMA) on Monday.

The cement manufacturers were worried over the rising input cost as free-on-board coal prices surged to over $210 a ton in September 2021 as compared to just $68 per ton a year ago.

During the month, local cement dispatches declined 1.88% to 4.018 million tons as compared to 4.095 million tons in September 2020, the data revealed.

Moreover, exports tumbled 49.43% to 0.572 million tons in September 2021 as against 1.131 million tons a year ago.

Data breakdown suggests northbased cement mills dispatched 3.451 million tons to the domestic market as compared to 3.523 million tons in September 2020, showing a decline of 2.04%.

South-based mills dispatched 567,445 tons to the domestic market in September 2021, slightly less than 571,639 tons a year ago. Exports from northern mills slumped 61.63% to 110,245 tons against 287,287 tons in September 2020. Exports from south declined 45.29% to 461,340 tons in September 2021 from 843,334 tons in the same month of previous year.

During the first quarter of ongoing fiscal year, total cement dispatches declined 5.67% to 12.825 million tons from 13.596 million tons in the corresponding period of previous fiscal year.

Further analysis indicates that domestic uptake of the commodity increased 3.92% to 11.279 million tons from 10.853 million tons during July-September 2020.

Exports during the quarter dipped a massive 43.64% to 1.546 million tons from 2.743 million tons in the same quarter of previous year. During the first quarter of FY22, northern mills dispatched 9.483 million tons to the local market, showing a slight increase of 0.22% as compared to 9.463 million tons during July-September 2020. Exports from north declined 37.69% to 387,667 tons as compared to 622,186 tons exported during the same quarter of previous year.

Likewise, southern mills dispatched 1.795 million tons to the local market during July-September 2021 as against 1.39 million tons during the same quarter of previous year, showing an increase of 29.15%.

There was, however, a massive decline of around 45.38% in exports from the south zone as volumes reduced to 1.158 million tons in JulySeptember 2021 from 2.12 million tons in the same period of previous year.

According to a spokesman for APCMA, ocean freight from South Africa to Karachi increased to $30 per ton from just $11 a ton in September 2020. He mentioned that rising energy tariffs coupled with increasing petroleum prices also affected the cost of doing business.

The spokesman, however, voiced hope that the industry would regain the lost momentum in coming months owing to government policies for the construction sector.