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Cement Sales Take a Hit in Q1 of FY22

The overall cement sales (domestic and exports) during the first quarter of FY22 (July-September) fell by 5.67 percent to 12.825 million tons as compared to the 13.596 million tons sold during the corresponding period of the last fiscal year.

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According to the data released by the All Pakistan Cement Manufacturers Association, the domestic uptake of the cement increased by 3.92 percent to 11.279 million tons from 10.853 million tons during July-September 2020, while the exports during the same period declined massively by 43.64 percent to 1.546 million tons from 2.743 million tons.

Apart from the dropped despatches, the cement manufacturers are worried about the continuous increase in input costs as coal FOB prices have increased from around $68 per ton in September 2020 to over $210 per ton during September 2021.

The mills in the north sold 9.483 million tons of cement domestically during the first quarter of the current fiscal year, showing a slight increase of 0.22 percent than the cement despatches of 9.463 million tons during July-September 2020.

The exports from the north declined by 37.69 percent to 387,667 tons during July-September 2021 as compared to the 622,186 tons exported during the same period last year.

The domestic sales of the southern mills during July-September 2021 were 1.795 million tons, which indicated a healthy increase of 29.15 percent over 1.39 million tons of cement despatched during the same period of the last fiscal year.

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There was a massive decline of around 45.38 percent in the exports from the southern zone as the volumes reduced to 1.158 million tons in the first three months of the current fiscal year from 2.12 million tons during the corresponding period of the last fiscal year.

The sales of cement sales declined by 12.17 percent in September 2021 as the total sales were recorded at 4.589 million tons against 5.225 million tons during the same month of the last financial year.

The local cement despatches by the industry during the month of September 2021 were 4.018 million tons as compared to 4.095 million tons in September 2020, showing a reduction of 1.88 percent.

The export despatches declined greatly by 49.45 percent as the volumes reduced from 1.131 million tons in September 2020 to 0.572 million tons in September 2021.

In September 2021, the north-based cement mills sold 3.451 million tons of cement in the domestic markets, showing a decline of 2.04 percent over 3.523 million tons despatches in September 2020. The south-based mills sold 567,445 tons of cement in the local markets during September 2021 that was slightly lesser than the despatches of 571,639 tons during September 2020.

The exports from the northern mills dipped steeply by 61.63 percent as the quantities reduced from 287,287 tons in September 2020 to 110,245 tons in September 2021. The exports from the south also decreased by 45.29 percent to 461,340 tons in September 2021 from 843,334 tons during the same month last year.

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The spokesman for the APCMA stated that the API4 Richards Bay coal FOB prices have increased from around $68 per ton in September 2020 to over US $210 per ton during September 2021.

Ocean freight from South Africa to Karachi has also increased from $11 per ton in September 2020 to $30 per ton in September 2021. The parity of the Pakistani Rupee with the US Dollar also increased from Rs. 165 per dollar to over Rs. 171 per dollar during the same period.

He added that the power and energy rates are constantly increasing and the cost of transportation has also increased sharply due to the increase in the prices of petroleum adding to the cost of delivery to different destinations. These price escalations have seriously affected the cost of doing business in the local and international markets.

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