Cement dispatches fall 8% in first 10 months of FY22

KARACHI: The total cement dispatches witnessed a decline of 8.1 per cent to clock-in at 44.33 million tonnes during the first 10 months of fiscal year 2022, data by All Pakistan Cement Manufacturer Association (APCMA) showed.
The total cement dispatches arrived at 48.25 million tonnes during the same period of last fiscal year.
The overall dispatches in April 2022 reached 3.52 million tonnes, down 30 per cent on a month-on-month basis and 28.6 per cent on a year-on-year basis.
“During the period, uncertainty over the macroeconomic front coupled with political uncertainty and rising construction cost led the cement sector under pressure,” Tanweer Ahmed at Pearl Securities Limited said.
During the 10 months of fiscal year 2022, the local dispatches fell 2 per cent on a year-on-year basis to clock-in at 39.53 million tonnes, compared with 40.23 million tonnes during the same period of last fiscal year.

The Southern region witnessed a surge of 9 per cent in offtakes, reaching 6.8 million tonnes, while the Northern region’s offtakes posted a decline of 3.7 per cent to 32.73 million tonnes during the first 10 months of fiscal year 2022.
On a monthly basis, the total local volumes clocked-in at 3.37 million tonnes in April 2022, registering a decline of 29 per cent, against 4.75 million tonnes in March 2022.
The Northern region registered a decline of 27.3 per cent on a month-on-month basis and 17 per cent on a year-on-year basis with 2.8 million tonnes in dispatches and Southern region’s dispatches declined 37 per cent on a month-on-month basis and 18 per cent on a year-on-year basis to reach 0.57 million tonnes in April.
“We believe the decline in local dispatches is primarily attributed to the slowdown in construction works during the month of Ramadan along with the poor utilisation of funds allocated for the construction sector as only 47 per cent of the total Public Sector Development Programme (PSDP) funds were utilised in nine months of fiscal year 2022,” Ahmed said.
On the export front, the total dispatches declined 40 per cent on a year-on-year basis to 4.8 million tonnes during the first 10 months of fiscal year 2022.
The North region noted a decline of 66 per cent with dispatches of 741,000 tonnes as against 2.16 million tonnes in during the same period of last fiscal year, whereas exports from South clocked in at 4.06 million tonnes portraying a decrease of 31 per cent during the period under review.
Similarly, the exports plunged by 82 per cent on a year-on-year basis and 47 per cent on a month-on-month basis to clock-in at 0.16 million tonnes in April 2022.
The North region’s exports declined 75.2 per cent to reach 62,000 tonnes and South exports also experienced a downfall of 85 per cent to settle at 94,000 tonnes in April 2022.
On a monthly basis, the exports from both North and South narrowed 23 per cent and 56 per cent in April 2022, respectively.
Ahmed said that the fall in the exports is primarily attributable to the slowdown in demand in the global markets which are already cooped-up by high inflation.
“Similarly, freight rates have soared by 4x to 5x over the past years coupled with the supply chain disruptions amid Russia-Ukraine war which caused the shortage of containers, thus, led to a massive decline in the exports,” he added.
“Going forward, we expect the sector demand to remain under pressure due to the continuous cut in PSDP allocation and lower utilisation. Similarly, the PSDP allocation in the upcoming federal budget for FY2022/23 is expected to hold lower figures, hence, the domestic sales volume could be pressurised.
On the other hand, the industry is trying to fully switch to Afghan coal as it does not seem to bear the ongoing high international coal prices where Afghan coal prices have also been on the rise. Therefore, the further hike in cement prices may somehow impact the demand in the upcoming periods,” Ahmed concluded.