Local cement dispatches in Pakistan are expected to decrease by 18% month-on-month (MoM) to 2.76 million tonnes in June 2024, according to Topline Research. Dispatches are also anticipated to decline by 21% year-on-year (YoY). This analysis is based on actual figures for the first 23 days of June, which show local sales at 2.05 million tonnes.

The MoM decrease is primarily due to fewer working days in June 2024 because of Eid holidays. Sales in May 2024 were higher due to post-Ramadan seasonal demand, with sales at 3.36 million tonnes compared to the 11MFY24 monthly average of 3.19 million tonnes.

Given these sales figures, the average daily domestic sales for the sector are expected to be 92,000 tonnes/day in June 2024, lower than the June 2023 average of 116,300 tonnes/day.

The YoY decline in local cement dispatches is attributed to a slowdown in construction activities due to higher costs of construction inputs and a 13% and 7% increase in cement bag prices in the North and South, respectively.

Exports in June 2024 are anticipated to decrease by 45% MoM and by 11% YoY. The MoM decrease is due to Eid holidays, while the YoY decline is due to lower international demand and reduced clinker sales in June 2024.

This results in Pakistan’s total cement sales reaching around 3.28 million tonnes in June 2024, down by 19% YoY and 24% MoM. Total cement capacity utilisation in June 2024 is estimated at 48%, compared to 62% in May 2024 and 66% in June 2023.

In FY24, total cement sales are likely to increase by around 1% YoY, with local sales expected to decline by 5% YoY and exports to increase by 57% YoY. This marks the first time in over 30 years that local cement sales have declined for three consecutive years.

The average retail price in June 2024 increased by 4% MoM in the North and remained almost unchanged in the South, according to the Pakistan Bureau of Statistics (PBS).