‘Cement exporters find opportunity in Indian ban on petcoke’

KARACHI: Pakistan’s struggling exporters may ramp up cement exports to India as the neighbouring country is likely to extend the ban on petroleum coke, a key input for cement production, nationwide, an analyst said on Wednesday.
Analyst Faraz Abbas at Insight Securities said Indian government slapped a ban on use of petroleum coke in its three stats, but it may extend it across the country, leading to a rise in demand of alternative fuels, especially coal, which could create upward pressure on global coal prices.
Abbas said coal appetite of India, which is the world’s second biggest coal consumer, would be whetted and there would consequently be a rise in international coal prices. “But, there is an opportunity for Pakistani cement players to increase exports to India due to a potential increase in Indian cement prices after a switching from pet coke to expensive coal,” he added. “This ban can act as positive news for Pakistani cement players provided Indian cement players pass on the impact of increased costs to the consumers.”
Afghanistan and India are two biggest consumers of Pakistan’s cement due to their geographical proximity and cement can be exported to the neighbouring countries through land routes. Pakistan exported 27 percent (1.3 million tons) of its total cement exports to India via sea and land during the last fiscal 2016/17.
The country exported 1.7 million tons to Afghanistan via land during the past fiscal year. Cement exports, however, fell 21 percent to 4.7 million tons in FY2017 despite that local off-takes are increasing on account of infrastructure uplifts. Domestic dispatches rose eight percent to 35.7 million tons during the last fiscal year.
Cement exports continued to decline and cement markers are desperately scouring through different international markets to boost export earnings. Local cement industry is massively investing in capacity enhancement in view of China-Pakistan Economic Corridor projects. They planned to increase production capacity by 26 to 28 million tons to 72 million tons plus within the next two to three years.