Cement sales fall 14.8 percent in January as local demand dries up

LAHORE: Cement dispatches fell 14.8 percent year-on-year in January to 3.414 million tonnes, as domestic demand slumped amid a slowdown in construction activity, data from the industry body showed on Friday.

The All Pakistan Cement Manufacturers Association (APCMA) said local dispatches dropped 17.3 percent to 2.967 million tonnes in January, while exports rose 6.8 percent to 446,595 tonnes.

In January 2024, North-based cement mills dispatched 2.434 million tonnes, showing a decline of 15.83 percent compared to 2.892 million tonnes dispatched in January 2023.

The South-based mills dispatched 979,970 tonnes of cement during January 2024 which was 12.08 percent less than the dispatches of 1.115 million tonnes during January 2023.

The North-based cement mills dispatched 2.385 million tonnes of cement in domestic markets in January 2024 showing a decline of 16.50 percent compared to 2.856 million tonnes dispatched in January 2023. South-based mills dispatched 582,258 tonnes of cement in local markets during January 2024 which was 20.43 percent less than the dispatches of 731,747 tonnes during January 2023.

The exports from North-based mills increased by 38.81 percent as the quantities increased from 35,215 tonnes in January 2023 to 48,883 tonnes in January 2024. Exports from South-based mills slightly increased by 3.88 percent to 397,712 tonnes in January 2024 from 382,852 tonnes during the same month last year.

During the first seven months of the current fiscal year, total cement dispatches (domestic and exports) were 27.296 million tonnes which were 5.92 percent higher than 25.770 million tonnes dispatched during the corresponding period of the last fiscal year.

Domestic dispatches during this period were 23.196 million tonnes compared to 23.618 million tonnes during the same period last year showing a reduction of 1.79 percent. The export dispatches showed a healthy increase of 90.49 percent as the volumes increased to 4.1 million tonnes during the first seven months of the current fiscal year compared to 2.152 million tonnes exported during the same period of the last fiscal year.

The North-based mills dispatched 19.157 million tonnes of cement domestically during the first seven months of the current fiscal year showing a reduction of 1.14 percent compared to cement dispatches of 19.378 million tonnes during July 2022 to January 2023. Exports from North-based mills increased by 33.71 percent to 820,056 tonnes during July 2023 to January 2024 compared to 613,289 tonnes exported during the same period last year.

The total dispatches by North-based mills remained almost flat at 19.977 million tonnes during the first seven months of the current financial year from 19.991 million tonnes during the same period of the last financial year.

Domestic dispatches by South-based mills during July 2023 to January 2024 were 4.039 million tonnes showing a reduction of 4.74 percent compared to 4.240 million tonnes of cement dispatched during the same period of the last fiscal year. Exports from South-based mills massively increased by 113.11 percent to 3.279 million tonnes during July 2023 to January 2024 compared to 1.539 million tonnes exported during the same period last year.

The total dispatches by South-based mills increased by 26.65 percent to 7.319 million tonnes during the first seven months of the current financial year from 5.779 million tonnes during the same period of the last financial year.

A spokesman of the All Pakistan Cement Manufacturers Association warned about the serious implications of the new axle load regime which reduced the loading capacity of vehicles significantly, leading to operational inefficiencies and increased inland transportation cost as well as freight, handling and shipping costs for export consignments.

“All these factors will put pressure on cement prices and likely result in high cost to the domestic consumers and adverse effects on export markets,” the spokesman said. “The APCMA has repeatedly requested the concerned quarters of the government to review the new axle load regulations and to address the related concerns of industry on priority.”