LAHORE - International coal prices, after witnessing 19% dip in past two years, have further dropped by around12% in FY15-16 and currently stands at US$52/ton compared to US$59/ton in June 2015.

Slow down in demand from China and US along with rising capacities in other countries have led to the decline in coal prices. Going forward, coal prices are likely to remain weak in short term as EIA expects US demand to remain depressed. However, potential demand from South Asian countries might take prices up in longer term.

Cement producers have remained the major beneficiaries of continued fall in coal prices in FY14 and FY15. Recent drop in prices is likely to bring more joys to the cement makers as it would expand margins by 2pps in FY16, experts said.

They said that during the month of August 2015, cement despatches rose by 10.24 percent despite a decline of over 31 percent in exports as the domestic uptake continued to rise in view of accelerated economic activities.

A spokesman of APCMA said that domestic uptake is a good sign for the industry however the decline in exports should be taken seriously by the regulators as cement with proper government interest could  earn much more precious foreign exchange for the country.