Cement dispatches show a minor growth of 4.0 percent in first half

Cement dispatches show a minor growth of 4.0 percent in first half

KARACHI: Pakistan’s cement dispatches depict a growth of 4.0 percent in first half of the current fiscal year (July-December 2018) to 23.11 million tons, primarily due to robust export – up 48 percent to 3.55 million tons - amid strong overseas demand for clinker and cement while domestic off take remained almost stagnant to19.56 million tons. Further dissection revealed that the North region remained under pressure with dispatches portraying a dip of 7 percent in 1HFY19 to 16.94 million tons; local sales were down by 6 percent to 15.48 million tons while exports followed a similar trajectory - down 18 percent to 1.47 million tons - given distance to the port. In comparison, South displayed a stellar growth in total dispatches of 55 percent 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. Provisional cement data for the month of December 2018 indicates a 1.0 percent decline in dispatches to 3.87 million tons compared with 3.9 million tons in November 2018 owed to weak demand in peak winter season and holidays on account of New Year. Whereas a minor 4.0 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 PKR 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, says a report issued by Arif Habib Limited. “Half way through FY19, we have established that exports would continue to shield the sector with improved dollar denominated margins. While post winter season and end of ban on high rises in Karachi could potentially aid local sales in upcoming months,” Misha Zahid at Arif Habib Limited said. On the pricing front, positive movement in North and South during the quarter in the wake of slower demand season has been favorable for sector wide margins. Going forward, pricing power in North may be tested once again with scheduled capacity additions from Cherat Cement (CHCC) and Maple Leaf Cement (MLCF) in 2HFY19.
What is your view on this ? Let us know in the comments section
Ad
More