Not that solid: Cement prices fall by Rs10 per bag

Cement manufacturers have decreased prices by Rs10-12 to Rs418-420 per bag

KARACHI: Cement manufacturers in northern part of the country have decreased prices by Rs10-12 to Rs418-420 per bag amid slowdown in construction activities. This price is expected to pick up once the labour force, currently employed for harvesting wheat, has completed sowing by May-end and is free for construction work, according to analysts. The recent price cuts – an occurring trend over the years – will be reversed in one or two weeks and have a negligible impact on revenues, said BMA Capital analyst Muhammad Affan Ismail. Going forward, federal excise duty (FED) reduction by Rs200 per ton in the upcoming fiscal 2013 budget will add Rs10 per bag into the local selling level. “The industry will pass on the impact initially for few days which later on will be completely absorbed into the retention level,” said Ismail. The recent dip in coal prices to $97 per ton – lowest levels since October 2010) and commencement of alternate fuel projects by cement industries, will mitigate any rise in cost and keep gross margins intact, added Ismail.

Published in The Express Tribune, May 17^th, 2012.