Cement manufacturers in the southern region have increased cement prices by Rs50 to 100 per tonne, effective from today. Thatta Cement and Al-Abbas Cement have increased their cement prices by Rs100 per tonne to Rs7,100 per tonne. Whereas, Lucky Cement and Attock Cement have increased their cement prices by Rs50 per tonne to Rs7,550 and Rs7,650, respectively.
Domestic cement prices have remained resilient around Rs400 per bag, despite an oversupply of around 12.8mn tonnes after Fauji Cement brought its 7,200 tonnes per day plant online. International coal prices on the other hand, have been tracing a declining trajectory, losing more than 10 per cent since the start of 2QFY12. Coal prices have averaged around $109 per tonne (RB fob) in 2QFY12 compared to $118 per tonne in 1QFY12, cooling off by 7 per cent QoQ.
‘We believe, this opposite movement in cement and coal prices is expected to widen the gross margins of the domestic cement manufacturers, hinting at a healthy profitability growth during 2QFY12,’ said Syed Abid Ali at AHL. According to the latest figures issued by All Pakistan Cement Manufacturing Association (APCMA), cement manufacturers sold 15.4mn tonnes of cement in 1HFY12; a 4 per cent YoY improvement, when compared with 14.8mn tonnes in 1HFY11. Total dispatches in December 2011 jumped by 19 per cent MoM to 2.7mn tonnes as compared to 2.3mn tonnes sold in November 2011. This was mainly on account of 24 per cent MoM improvement in domestic sales coupled with a 5 per cent MoM improvement in exports.
