Cement dispatches down to 3.87 million tons in December

Cement dispatches down to 3.87 million tons in December

Karachi, January 4, 2019 – Provisional cement data for the month of December 2018 has revealed a 1 percent month-on-month (MoM) decline in cement dispatches, totaling 3.87 million tons, compared to November 2018 when it stood at 3.90 million tons.

The fall in demand is attributed to the onset of winter and holiday season due to New Year celebrations.

Analysts at Arif Habib Limited reported that despite this minor MoM decline, there was a 4 percent year-on-year (YoY) growth in cement dispatches for December 2018. This growth was largely driven by exports, which experienced a remarkable 81 percent YoY increase, reaching 0.59 million tons. The boost in exports can be attributed to the depreciation of the Pakistani rupee, US sanctions on Iran, and the influence of environmental organizations advocating for the closure of polluting plants globally. These factors have helped Pakistan regain its position in the export market.

However, the demand for cement in the northern region of the country was lackluster, resulting in an overall decline in local sales, which dropped by 4 percent YoY to 3.27 million tons.

Looking at the broader picture, the first half of fiscal year 2018-2019 (1HFY19) showed a 4 percent YoY growth in cement off-take, amounting to 23.11 million tons. This growth was primarily fueled by robust export data, which saw a 48 percent YoY increase to 3.55 million tons. In contrast, domestic off-take remained nearly stagnant, with a slight 1 percent YoY decrease, totaling 19.56 million tons.

A more detailed analysis revealed that the North region of the country continued to face challenges, with dispatches falling by 7 percent YoY in 1HFY19 to 16.94 million tons. Local sales in the North also declined by 6 percent YoY to 15.48 million tons, while exports from the North saw a steeper 18 percent YoY decrease, reaching 1.47 million tons, mainly due to logistical challenges and distance from ports.

In contrast, the South region displayed strong growth in total dispatches, with a remarkable 55 percent YoY increase to 6.17 million tons. Local off-take in the South region experienced a notable upturn of 21 percent to 4.08 million tons, while exports from the South region surged by an impressive 243 percent to 2.08 million tons, driven by the growth in sea-based exports during the year.

The cement industry is a key indicator of the construction and infrastructure development in Pakistan. The fluctuations in cement dispatches provide insights into the country’s economic conditions and construction activity. The boost in exports, despite domestic challenges, reflects the industry’s resilience and adaptability to global and domestic factors.