Karachi, August 04, 2021 (PPI-OT): Pakistan Cement: Seasonality weighs down over local cement sales

Cement sales had a muted Jul’21, with local sales witnessing a decline of 13/26% YoY/MoM as seasonality took a toll where slowdown induced by Eid was exacerbated by widespread rain across North particularly while exports went down by 28%YoY.

Region wise, South fared slightly better with an increase of 7%YoY partially due to low base, while on the other hand, North witnessed a decline of 15/25% YoY/QoQ.

Coal prices continue to cause trouble, increasing by 49% CYTD however local manufacturers have increased prices by PkR50-55/bag during last two months while further price increases cannot be ruled out in order to fully pass on the increase in cost.

Even though sector has remained under pressure recently due to increasing coal prices, we expect the sector to come back into limelight post result season and particularly if coal prices recede where we continue our preference for LUCK (TP: PkR1289/sh) and MLCF (TP: PkR80/sh).