Cement dispatches surged by 3%MoM
According to the data released by APCMA, total cement dispatches witnessed a marginal growth of 3%MoM in Nov-13 as compared to previous month.
Local dispatches grew significantly by 8%MoM to stand at 2.13mn tons whereas export sales went down to 0.6mn tons (down 11%MoM), lowest in 10-months. The stumpy demand from neighboring country Afghanistan and transportation strike during the period is the key reason behind sluggish growth. As a result, total dispatches settled at 2.73mn tons against 2.65mn tons in Oct-13.
According to research analyst Kumail, “on cumulative basis, volumes increased meagerly by 0.4%YoY to 13.18mn tons in 5MFY14 against 13.13mn tons in 5MFY13.
Due to prolonged monsoon seasons in Northern areas of Pakistan, the domestic sales witnessed a muted growth of 2%YoY to 9.66mn tons as compared to 9.48mn tons during same period last year. On the other hand, exports declined by 3%YoY to 3.52mn tons from 3.64mn tons.
The average utilization of the industry during the period stood at 70.85% in 5MFY14 which is quiet low as compared to 74% during the full period of FY13.”
Devaluation of PKR can further be explained as a support to exports revenue.
Despite continuous decline in exports volume, PKR weakness against green back will provide roof to the dwindling volume. However, seasonal uptick in coal prices (hovering around US$83/ton) and the continuous PKR deprecation would further makes it expensive for local manufacturers. Though, we expect the coal prices to remain stable at US$80/ton during FY14 (down by 3%YoY).