Cement sales dip 16.6% in Jan

Decline comes amid slowdown in construction activities

LAHORE:

The cement sector witnessed a contraction of 16.58% in January 2022 as total sales came in at 3.95 million tons against 4.73 million tons in the same month of last year.

According to data released by the All Pakistan Cement Manufacturers Association (APCMA) on Wednesday, local offtake of the commodity shrank to 3.4 million tons in January this year compared to 4.04 million tons in January 2021, showing a reduction of 15.87%.

Cement exports suffered a massive blow as they dropped 20.71% to 551,006 tons in January 2022. Foreign shipments of the commodity had stood at 694,934 tons in January 2021.

During the month under review, cement mills based in the northern region sold 2.71 million tons in the domestic market, which was 18.29% lower than sales of 3.31 million tons in January 2021.

On the flip side, domestic sales by mills in the southern region came in at 693,453 tons during January 2022. They were 4.82% less than the dispatches of 728,568 tons in January 2021.

Exports from mills in the upcountry areas nosedived 94.12% as shipments decreased from 233,404 tons in January 2021 to 13,727 tons in January 2022.

Exports from mills in southern parts of the country rose from 461,530 tons in January 2021 to 537,279 tons in January 2022, a surge of 16.41%.

Jul-Jan data

In the first seven months of current fiscal year 2021-22, total cement offtake (domestic and exports) stood at 31.4 million tons, which was 5.89% lower than sales of 33.37 million tons during the corresponding period of last year.

Further analysis indicated that domestic offtake of the commodity fell 0.69% to 27.47 million tons. Domestic sales had been 27.66 million tons during July-January FY21.

During the seven-month period under review, exports fell 31.04% to 3.94 million tons from 5.71 million tons during July-January FY21.

“The decline in cement sales is hitting the industry as it is already under immense pressure due to a sharp increase in the cost of production, which includes international coal prices, power tariff and transportation cost,” said a spokesman for the All Pakistan Cement Manufacturers Association in a statement.

He highlighted that slowdown in construction activities for public sector development projects amid unfavourable weather conditions was among major causes behind the lower consumption of cement.

“The decline in exports should be a matter of concern for the government as it is negatively impacting the much-needed foreign exchange reserves of the country,” he added.

“One of the main reasons behind the drop in exports via sea route is the shortage of containers,” he said. “Increase in demand for containers has pushed up freight cost from $500 per container to $1,500, making Pakistani cement uncompetitive in the international market.”

Published in The Express Tribune, February 3^rd, 2022.

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