LAHORE - The cement demand is expected to close the election year on a strong note with double digit growth in dispatches and utilisation level of around 93 percent, experts said.

They said the FY18 has proved to be a good year in terms of demand with double digit growth of 14 percent YoY in total dispatches, courtesy exuberant local sales (+16 percent) and reversal in exports. Consequently, the utilisation level of the industry surged to a highest ever level of 93 percent. Election year spending remained the key driving force behind local sales growth where PSDP disbursement till date has exceeded the revised budget allocation of Rs750b (Rs752b disbursed as of 25-June 2018). Moreover, private sector activity continued to provide support to the local demand growth story. A cumulative 4.45m tons supply addition in the industry diverted the focus towards exports amid declining local retention prices where exports of both clinker and cement picked up pace.

In June 2018, local dispatches are expected to decline by 23 percent MoM due to shortened working hours in Ramazan followed by Eid holidays and moderate rainfall. This is evident from steep 26 percent decline in North region dispatches as against 7 percent decline in South region during the month. Exports were also down 26 percent leading to total dispatches of 3m tons. On a YoY basis, however, total dispatches are expected to increase by 10 percent supported by 13 percent increase in local sales. Industry’s utilisation level during the month fell to 73 percent (lowest during the year).