LAHORE  - The international coal prices, a major cost component of the sector, continues to be a boon for the cement sector, as the bears have dominated the international coal market since 2012 where baring a few seasonal up ticks, prices have remained depressed. This bearish sentiment has further intensified in 2014 where coal prices (Richards Bay Index) have so far dipped by 14 per cent to $73.46/ton. According to cement industry experts, the weakness in coal is largely underpinned by a slowdown in the Chinese economy and global efforts to drive down coal demand (due to environmental concerns).

They said that a healthy mining output in coal exporting countries has exacerbated the situation. Meanwhile, as per the APCMA, March 2014 cement offtake stood at 3.19m tons, down 4 per cent YoY. The decline was primarily due to bad weather as heavy rains in the country hampered construction activity. As a result, domestic dispatches plunged sharply by 4 per cent YoY to 2.46m tons though on a MoM basis, local sales are up by a massive 17 per cent.