EUR 35.00 For Business Accounts Only

Pakistan Cement: Record Cement Sales in Jul-2020; 40%+ YoY growth likely

• The overall cement sales in Jul-2020 is expected to reach the previous monthly record high sales of 5.0mn tons (recorded in Oct-2019), up 38-44% YoY and 5-9% MoM.
• The average sales pre-COVID19 (Jul 2019 – Feb 2020) was at around 4.2mn tons.
• The local sales are expected to rise by 33-39% YoY, while exports are likely to be 67-71% YoY higher. We expect exports to touch an all time high of 900k tons.
• The significant YoY improvement in local cement dispatches is on the back of low base effect as sales remained dull in Jul-2019 due to imposition of conditions like (1) CNIC required over purchase of Rs50k and (2) restriction on sales to unregistered dealers. Furthermore, increase in public spending and pent up demand also resulted in such huge increase in dispatches.
• Our analysis is based on actual 27 days sales, clocking in at 3.2mn tons in North and 480k tons in South. The exports during these 27 days have touched the 800k+ mark.
• As per our channel checks, average sales during the last four days is expected to clock in at 89k tons in the North Region taking into consideration upcoming EID and wet weather.
• Similarly, in the South region we have assumed per day average of 11k tons for the last four days.

Cement prices during Jul-2020 averaged at Rs520/bag in North, up by Rs9/bag compared to last month. The South region witnessed a decline of Rs8/bag to average at Rs614/bag