Cement Demand Slumps Amid Construction Slowdown

The demand for cement decreased by 9% in February and 13.4% in the first eight months of FY23 due to a slowdown in construction amidst uncertain economic conditions. During the month, the total cement dispatches were 4.04 million tons, a decline of 7% compared to 4.34 million tons in February last year. Local sales were 3.59 million tonnes in February 2023, down from 3.943 million tonnes in February 2022. However, exports increased by 11% to 449,940 tonnes from 405,489 tonnes. Total cement dispatches, including both domestic and export, amounted to 29.81 million tons during 8MFY23, indicating a decline of 16.65% compared to 35.763 million tons in the same period of the previous fiscal year. Domestic sales dropped to 27.207 million tons from 31.41 million tons, while exports plummeted by 40.15% to 2.602 million tons from 4.348 million tonnes in 8MFY22. A spokesperson for the All Pakistan Cement Manufacturers Association (APCMA) highlighted that the current economic situation has worsened, leading to significant operational difficulties. He added: According to Sunny Kumar from Topline Securities, the decrease in local cement sales during the past eight months can be attributed to the increasing cost of construction and the inflationary impact that has limited demand growth. Kumar also noted that the decline in exports during the first eight months of FY23 was due to the global economic slowdown and unfavorable export pricing. Regarding capacity utilization, Kumar stated that it was at 62% in February, which is higher than the 8MFY22 average of approximately 59%.