According to a local research house, cement prices in north of Pakistan have declined from the recent peak of PKR550/bag (US$3.55/bag) (October 2019) and now they have fallen below PKR490/bag in some areas of north Pakistan.
An analyst of Intermarket Securities Ltd attributes this fall to a drop in demand during the winter season as well as reportedly aggravated price competition by Cherat Cement (CHCC), which is trying to sell in other markets than its allocated areas.
According to the report, cement prices in Peshawar, Islamabad, Rawalpindi, Lahore and Faisalabad are hovering in the price range of PKR480-510/bag.
Moreover, in the south, market prices have fallen below recent high of PKR700/bag (Karachi). Price competition followed the recent commissioning of Power Cement’s new capacity in Nooriabad.
However, price competition erupted before commissioning of new capacities of Lucky Cement, Kohat Cement and Pioneer Cement, which are now slated to be online by 3QFY20. Therefore, there is the risk that the present price competition may persist and escalate when new capacities come online, the report concludes.