Cement exports likely to post 37pc growth in May

KARACHI: Cement exports are expected to post stellar growth of more than 37 percent year-on-year in May due to addition of new production plants of Lucky Cement (Luck) and Attock Cement Pakistan (ACPL), a brokerage reported on Wednesday.

“We expect export dispatches to remain over 400,000 tons during May,” Nabeel Khursheed, an analyst at Topline Securities said. “Higher exports from Luck and ACPL’s new cement lines in south region, which came online in December 2017 and January 2018, continue to support this growth as sea exports are expected to settle over 200,000 tons, up by more than 100 percent year-on-year (in May).” Currency devaluation also supported growth in export.

Cement exports are likely to decline 11 percent in May over the previous month. Cement exports are expected to remain flat at 4.324 million tons during the first 11 months of the current fiscal year. Lucky Cement’s annual production capacity rose 21 percent to 9.35 million tons after the completion of its new plant in December last year that aims to capitalise on construction boom along Gwadar port.

In the subsequent month, Attock Cement kick-started production from its new plant in Hub with 1.2 million annual capacity.

In July-May, cement dispatches are expected to post a 13 percent growth to 42.557 million tons due to growing uptake of the commodity in the local market.

Local sales are likely to rise 15 percent to 38.233 million tons during the period under review. The industry’s capacity utilisation is expected to clock in at 94 percent.

Khursheed said local cement demand might remain weak in the following month due to Ramazan and Eid holidays. “We anticipate cement consumption to remain below four million tons in June 2018.”

In May, cement dispatches might inch up two percent year-on-year to 3.789 million tons. There might be a 11 percent decline in May over the previous month due to Ramazan during which construction activities usually slow down.

Cement sales are expected to fall one percent year-on-year and 11 percent month-on-month in May, bringing the production capacity utilisation down to 90 percent.