The cement prices, after witnessing a drop of almost 15 percent during the last five months from Jan to May, have started reverting to previous level in north region’s retail market, as different brands prices were witnessed a kike of Rs20 on average. However, the rates in South region remained stable at an average of Rs630/bag.
Retail market sources noted that prices have now started to increase by Rs15-20 per 50kg bag across different cities in the northern region with the new price range standing between Rs580-600 per bag.
This improvement has been possible with supply adjustments, as the cement companies are trying to save their fast depleting margins.
In retail market of Lahore, different brands of cement bags are available, showing a hike in the range of Rs15 to Rs20 per 50kg bag against their previous rates of Rs560 to Rs580.
Presently, there are three popular brands in Lahore market including DG Cement, Bestway Cement and Maple Leaf Cement which are selling in the range of Rs580-600 per 50kg bag as per their demand and popularity, dealers said.
According to the weekly data of Pakistan Bureau of Statistics, Multan, Lahore and Islamabad have witnessed the steepest decline in cement bags wholesale prices during the last one month, as they have lost between Rs80-125 value to their 50kg cement bags though its impact was not seen anywhere in retail market in these cities. They said that majority of this drop has come during the months of May 2019.
Industry experts said that cement prices have been under immense pressure in the past few months due to increased competition as construction demand has considerably receded.
Cement companies, particularly in the north, have been racing to market to sell off excess production units while companies in the south have been selling off cement and clinker overseas, resulting into high growth in exports.
Industry sources said that despite hike in coal prices and rupee depreciation of about 36 percent and now low demand due to slow construction work in Punjab were the major factors which led to fluctuation in cement prices.
They said that domestic demand is suffering due to the slowdown in public infrastructure while the real estate market was reinforced by cuts in developing funding and expenditure.
On top of that, the exporting markets for these companies in Punjab have also dried out since India has halted trade with Pakistan, slapping hefty duties on Pakistani goods, while Afghanistan has become more and more difficult to penetrate for companies located in Punjab and KP owing to cheaper Iranian cement arrival in those markets.