KARACHI, May 10: Cement export is fetching US$65 fob per ton in the main middle eastern markets, the price showing a huge rise of 14 per cent or $8 per ton in just two months since March, when the prices ranged between $55 and $57 per ton.
A manufacturer-exporter who asked not to be named said on Thursday that prices had climbed on the back of burgeoning demand as construction activities were at its peak all across the region.
Many of the cement producer-exporters who were earlier willing to talk are now inclined to side step the question of exports and prices. And they have reason to do so. As overseas dispatches are getting to be noticeably high, local builders and contractors have started to raise hue and cry, complaining of high prices in the country. Local demand has also surged with the advent of summer, the peak construction season.
But if producers decide not to talk about exports, figures speak for themselves.
According to the latest release by the All-Pakistan Cement Manufacturers Association (APCMA), cement exports (minus clinker) showed growth of 72 per cent to 2.081 million tons for the 10 months (July-April, 2006-07), from 1.209 million tons in the comparable period of last year.
As for pricing earlier on March 6 this year, a cement producer had confirmed that Pakistani exporters of cement had come to dictate prices and terms. “I do not entertain any query below the fob price of $57 per ton,” he had boasted, adding in January the export prices were around US$47 to $48 per ton (see report in this space appearing on March 7).
Besides the captive markets of Afghanistan and Iraq, Pakistani cement had found new destination in Abu Dhabi; Qatar; Yemen; Morocco; Muscat; Iran; Dubai; Turkey; South Africa; Madagascar; Sri Lanka; Djibouti; Umul Qasr and potentially India.
Overseas reports fortify the fact that Pakistani cement exporters were creating more wealth for themselves (and hopefully for the country).
According to a report in the Gulf News on Wednesday, a majority of companies said the price of cement was now above Dh305 a ton compared to Dh260-Dh270 at the start of the year, showing 15-20 per cent increase. It stated that it could have a major impact in the country's real estate market as soaring prices of building materials could make freehold homes costlier.
In another report of May 3 filed from Qatar, the newspaper stated that the construction sector had been badly hit due to chronic shortage of cement which was forcing many contractors to import the material at higher cost and slow pedal on new work bids. “Imported cement now costs about QR25 per bag in the wholesale market while retailers sell it between QR35 and QR38. Local cement, particularly from Qatar National Cement Company (QNCC), the state’s largest producer, is priced only around QR14/bag,” the report stated.
But if exports from Pakistan were on the rise, should local builders and developers worry? Several analysts, who thought there might be an imminent glut, were re-writing their reports on the cement sector. They believed that for the short-term demand would exceed supply. But new expansion lines were on their way to roll out more bags of concrete. In July this year, Lucky had commissioned last of its four lines of expansions, raising plant capacity to 21,000 tons per day (tpd) maintaining its position as the largest cement producer and exporter in the country.
Expansion of Maple Leaf was slated to come on line before June. Though keeping a little quite, D G Khan is understood to have prepared for a formal launch of its expanded capacity early next week at the hands of a “VVIP”.
