Karachi, September 06, 2021 (PPI-OT): Pakistan cement: Local cement sales increase by 37%YoY for Aug’21

Local cement dispatches for the month of Aug’21 clocked in 3.8mn tons, up 37/11%YoY/MoM where low base effect played its part as COVID-19 related restrictions kept the base low for Aug’20 while for Jul’21, low number of working days due to Eid holidays played a part.

Overall, for 8MCY21, local dispatches have increased by 21%YoY to 32mn tons while exports have increased by 8%YoY taking total dispatches for 8MCY21 to 37mn tons, up 19%YoY.

A number of factors have converged to send coal prices to a 13 year high where as soon as decreasing gas prices in Europe provided hope of a decline in coal prices, Hurricane Ida has caused a storm in energy markets, adversely affecting LNG supply hence pushing coal prices even higher.

Even though sector has remained under pressure recently due to increasing coal prices, we expect the sector to come back into limelight in 2QFY22 where we continue our preference for LUCK (TP: PkR1289/sh) and MLCF (TP: PkR80/sh).