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Pakistan Cement: Local cement sales likely to drop to its 45-month low; Local dispatches down 35-37% YoY, exports to fall 33-35% YoY

• Affected by COVID-19 and Eid Holidays, local cement sales during May 2020 are likely to fall to its 45-month low to 2mn tons, down 35-37% YoY and 32-34% MoM.
• Major drag to monthly sales is likely to come from the South region, where sales are down by 55-57% YoY, while sales are down by 35-37% YoY in the North region.
• Exports during the outgoing month are likely to witness a decline of 33-35% YoY mainly due to lower exports to Afghanistan. Clinker exports also remained on the lower side.
• Hence, total sales during May 2020 are expected fall by 37-39% YoY, resulting in a 1% YoY decline during11MFY20.
• To highlight, North region recorded zero sales during May 23-25 amidst Eid Holidays, while offtake on May 22 and May 26 averaged at around 11.5k per day.
• Excluding these five days sales, per day sales in north region averaged at 75k per day, which is down 24% YoY.
• PIOC is likely to outperform industry by posting growth of 24% YoY due to successful commissioning of its new plant.
• According to PBS data, average cement prices in North region during May-2020 clocked in at Rs520/bag from ~Rs510 in Apr-2020.

Prices in South region remained unchanged at Rs620-630/ bag.