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Cement sales decline massively by 54% YoY, 66% MoM in July

Cement sales decline massively by 54% YoY
Cement sales decline massively by 54% YoY
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July 28, 2022 (MLN): Cement despatches declined massively by 54% YoY and 66% MoM to 1.79mn tons in July 2022, data released by All Pakistan Cement Manufacturers Association (APCMA) showed today.

Slow disbursement of PSDP coupled with massive PKR depreciation and rising prices of petroleum products, electricity and coal, kept the cement demand under pressure.

Moreover, MoM's dismal growth was led by a significant 68% descent in domestic dispatches amid Eid holidays and monsoon rains across the country, which wiped off a major chunk of working days, Analyst at Arif Habib Limited said.

Going by the data, the local cement despatches by the industry during the month of July 2022 were 1.6mn tons compared to 3.4mn tons in July 2021 and 5mn tons in June 2022, showing a decrease of 52% over the year and 33% over the month.

Export despatches continued to suffer a massive decline of 67% over the year and 33% over the month as the volumes reduced to 0.15mn tons in July 2022 from 0.45mn tons in July 2021 and 0.2mn tons in June 2022.

Region-wise, during July 2022, North-based cement mills despatched 1.4mn tons of cement in domestic markets showing a decline of 67% MoM and 52% YoY.

On the other hand, South-based mills despatched 0.25mn tons of cement in local markets during July 2022 which was 71% lower compared to the despatches of 0.87mn tons in the previous month and 54% lower compared to 0.5mn tons in July 2021.
 
Exports from North-based mills massively declined by 155x YoY and 37% MoM to 0.06mn tons from 0.13mn tons in July 2021 and 0.09 in June 2022. Exports from the South also reduced by 72% YoY to 0.09mn tons in July 2022 from 0.3mn tons during the same month last year. On monthly basis, exports from the south dipped by 30% from 0.12mn tons in the previous month.

The fall in exports is primarily attributable to the slowdown in demand in the global markets amid inflationary pressure along with higher interest rates. Similarly, freight rates have soared by around 4-5x over the past years amid supply chain disruptions due to the Russia-Ukraine war that created volatility in international markets, thus leading to a massive decline in exports.

As a result of the above, total utilization of the cement industry dropped to just 31% in July 2022 from 92% witnessed last month and 77% in FY22.

Utilization of the North region settled at 33% compared to 98% in Jun’22 and 77% in FY22 whereas the South region posted a utilization of 25% compared to 72% in the prior month and 76% in FY22.

Copyright Mettis Link News

Posted on: 2022-07-28T13:34:45+05:00

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