KARACHI: Provisional cement data for the month of December 2018 indicates a 1 percent MoM decline in dispatches to 3.87 million tons (November 2018 at 3.90 million tons) owed to weak demand in peak winter season and holidays on account of New Years.
Analysts at Arif Habib Limited on Thursday said that a minor 4 percent YoY growth in December 2018 was led by exports cushioning the overall drop and displaying a stunning 81 percent jump YoY to 0.59 million tons as Pak rupee depreciation, US sanction on Iran and lobbying by environmental bodies to shut down plants globally that create pollution, has re-established Pakistan in the export market.
Albeit, lackluster demand in North which triggered overall decline in local sales (down by 4 percent YoY to 3.27 million tons).
With that said, off-take in 1HFY19 depicts a growth of 4 percent YoY to 23.11 million tons, primarily due to robust export data (+48 percent YoY to 3.55 million tons) amid strong overseas demand for clinker and cement while domestic off-take remained almost stagnant (-1 percent YoY to 19.56 million tons).
Further dissection revealed that the North region remained under pressure with dispatches portraying a dip of 7 percent YoY in 1HFY19 to 16.94 million tons; local sales were down by 6 percent YoY to 15.48 million tons while exports followed a similar trajectory (down by 18 percent YoY to 1.47 million tons) given distance to the port.
In comparison, South displayed a stellar growth in total dispatches (+55 percent YoY) to 6.17 million tons; local off-take posted a decent upturn of 21 percent to 4.08 million tons, while exports remarkably jumped up by 243 percent to 2.08 million tons with sea-based exports taking off during the year.