Pakistan cement industry witnessed an all-time high cement sales volume of 5.74mn tons in Oct 2020, marking an increase of 15% YoY.
Domestic Cement sales increased by 16% YoY while exports remained elevated by 11% YoY during October-2020.
Region-wise, volumes increased by 15% YoY for the northern region to 4.45mn tons while south Region witnessed volumes increasing by 15.5%.
The sustained increase in domestic Sales Volume may be due to the revival of construction activities in the country. Capacity utilization stands near 100% for the North Region Player. The domestic cement prices increased by ~1.7% MoM in the north and remained flat in the south.
The increase in domestic Cement Sales is primarily due to revival of private-sector construction activities owing to government waiver on disclosure of sources of money disclosure till Dec 2020 and (2) low-interest rates attracting money flow to real estate.
To highlight, it will be critical how the demand normalizes from January 2021 when the source of money condition is lifted for construction industry, in our view.
Northern region witnessed domestic market demand increased by 15.7% YoY due to surge in private demand while exports increased by 7% YoY due to smooth exports to Afghanistan. This allowed the northern region to operate at full capacity.
While, South market witnessed double digit growth in domestic/export markets with an increase of 17.6/13.2% respectively.
However, Exports have decreased on sequential basis with a decline of 22% as compared to September as local players shift their sales mix towards local market to take advantage of higher retention prices at offer with impressive demand growth in the backdrop.
For the period July-2020 to October-2020, local Cement dispatches stands at 10.8 million tons, marking a increase of 19% as compared to same period of last year.
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