Cement sales at 21-month low
Cement sales hit a 21-month low in September owing to passive domestic demand following the recent floods.
KARACHI:
Cement sales hit a 21-month low in September owing to passive domestic demand following the recent floods in the country.
Sales plummeted 22 per cent to two million tons in September against the same period last year, the largest decline since April 2001.
Similarly, sales were down 16 per cent on a monthly basis as reduced business activity in Ramazan also took its toll, said JS Global Capital analyst Syed Atif Zafar. “Demand is expected to pick up with reversal in the current trend from fiscal year 2012 as reconstruction activities take shape,” Zafar added in the company research report.
Despite the restoration of pricing consensus among cement manufacturers, a decline of four per cent is expected in industry volumes during fiscal year 2011.
JS Research team revised down its local demand estimate to 23.2 million tons for fiscal year 2011, a potential decline of 2 per cent from last year while looking at the current scenario.
Local demand battered
Local sales witnessed a bruising start to fiscal year 2011, down 16 per cent on a yearly basis in the first quarter owing to factors ranging from the recent flash floods to bad law and order situation. Dispatches were down 21 per cent to 1.4 million tons in September alone.
Sales were down seven per cent on a monthly basis due to Ramazan, largely in line with its 10-year average decline of 12 per cent during this period.
Exports disappoint as regional prices decline
Similar to local sales, exports were down 21 per cent to 2.3 million tons during the first quarter but for different reasons, informed Zafar.
International prices have fallen to unattractive levels for local cement manufacturers to consider exporting, particularly for those situated in the northern region of the country, said Zafar.
Moreover, with the inland freight subsidy unavailable to manufacturers, export sales were 18 per cent lower in the first quarter of 2011 compared with the preceding quarter.
On the export front, sales are anticipated to be in the vicinity of 9.7 million tons, down 9 per cent from the previous year, concluded Zafar.
Published in The Express Tribune, October 6th, 2010.
Cement sales hit a 21-month low in September owing to passive domestic demand following the recent floods in the country.
Sales plummeted 22 per cent to two million tons in September against the same period last year, the largest decline since April 2001.
Similarly, sales were down 16 per cent on a monthly basis as reduced business activity in Ramazan also took its toll, said JS Global Capital analyst Syed Atif Zafar. “Demand is expected to pick up with reversal in the current trend from fiscal year 2012 as reconstruction activities take shape,” Zafar added in the company research report.
Despite the restoration of pricing consensus among cement manufacturers, a decline of four per cent is expected in industry volumes during fiscal year 2011.
JS Research team revised down its local demand estimate to 23.2 million tons for fiscal year 2011, a potential decline of 2 per cent from last year while looking at the current scenario.
Local demand battered
Local sales witnessed a bruising start to fiscal year 2011, down 16 per cent on a yearly basis in the first quarter owing to factors ranging from the recent flash floods to bad law and order situation. Dispatches were down 21 per cent to 1.4 million tons in September alone.
Sales were down seven per cent on a monthly basis due to Ramazan, largely in line with its 10-year average decline of 12 per cent during this period.
Exports disappoint as regional prices decline
Similar to local sales, exports were down 21 per cent to 2.3 million tons during the first quarter but for different reasons, informed Zafar.
International prices have fallen to unattractive levels for local cement manufacturers to consider exporting, particularly for those situated in the northern region of the country, said Zafar.
Moreover, with the inland freight subsidy unavailable to manufacturers, export sales were 18 per cent lower in the first quarter of 2011 compared with the preceding quarter.
On the export front, sales are anticipated to be in the vicinity of 9.7 million tons, down 9 per cent from the previous year, concluded Zafar.
Published in The Express Tribune, October 6th, 2010.