KARACHI: Cement manufacturers have increased countrywide prices by eight to 13 rupees on a 50kg bag amid rising demand and costly import of coal, dealers said on Thursday.
Cement prices in the last two days have touched the highest level of Rs360 per 50 kg, a level last seen in 2009. It is selling at Rs340 per bag in northern part of the country while in south the rates are hovering at Rs360, said Wali Bhai Patel, a Karachi-based cement dealer.
Sheikh Adeel, Senior Manager Sales & Marketing at Maple Leaf Cement, dispelled a notion that the price increase by almost all the industrial players was due to cartelisation. “First, it was demand and then the rise in the cost of production.”
He said the post-flood demand in the northern region was on the rise and infrastructure projects in Punjab also indicated a growing appetite of the binding material. “The Pioneer Cement, alone, booked up an additional demand of one thousand tonnes last month in the district Mianwali,” he added.
Coal prices in the international markets have surged by around 30 dollar a tonne to 150 dollars since early December last year due to floods in Australia and ever-rising demand by China.
Moreover, the price of an empty cement bag has risen by Rs7 to Rs21 in a span of few months.
Majority of the cement plants in the country are coal-fired and coal makes up some 50 to 55 percent of the total raw material cost incurred by a cement factory.
Omar Rafiq, an analyst at BMA Capital, said the flood-hit areas in Pakistan could see a significant increase in the construction activities ahead of wheat cultivation in February. He said a visible impact of the increase in cement price on cement manufactures’ margins would become apparent in the fourth quarter (April-June) of the current fiscal year.
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