Cement sales in June may rise 34% MoM to 5.1 million tonnes

KARACHI: The total cement sales of the country in June 2021 is expected to rise 11 per cent to 15 per cent Year-on-Year (YoY) and 30 per cent to 34 per cent Month-on-Month (MoM) to 5.1 million tonnes to 5.3 million tonnes, reaching utilisation of around 93 per cent, according to a report issued on Wednesday.

“In absolute terms, total June 2021 cement sales could be the third highest monthly sales in the history of Pakistan,” the Topline Securities report said.

Previously, October 2020 witnessed sales of 5.73 million tonnes and March 2021 recorded cement sales of 5.37 million tonnes.

The 11 per cent to 15 per cent YoY growth in the total cement sales is likely due to strong demand from the private sector construction and initiation of work on dams, while 30 per cent to 34 per cent MoM increase in the total cement sales during June 2021 is due to the lesser number of working days in May 2021, amid extended Eid holidays.

The local cement sales are expected around 4.6 million tonnes to 4.8 million tonnes, up 20 per cent to 24 per cent YoY and 45 per cent to 49 per cent MoM.

South is expected to post robust growth of 75 per cent to 85 per cent YoY and 63 per cent to 69 per cent MoM. Local utilisation in June 2021 is expected at 83 per cent, where North’s utilisation is likely to be at 89 per cent and South at 60 per cent.

Cement exports during June 2021 are likely to decline on both MoM and YoY basis, due to higher local sales both in South and North regions. The retail prices during June 2021 have averaged at Rs623/bag in North, up Rs20/bag from May 2021 levels. In the South, these remained in the range of Rs640/bag to Rs650/bag, up Rs10/bag, compared with the last month.

During the fiscal year 2020/21, the cement sales are expected to clock in at 57.4 million tonnes, up 20 per cent YoY, highest in 14 years and also 7.8 per cent higher than the last 15 years.

The sharp rebound in cement sales is due to stagnant growth in the previous years and significant recovery in the construction activities after fiscal push by the government in the form of amnesty, markup scheme among others.

The capacity utilisation during the current fiscal year is likely to clock in at 85 per cent, up from 75 per cent in the preceding fiscal year.

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