Sources added the government would discuss this matter in the economic co-ordination committee meeting scheduled for this week. The government had allowed Rs60 per bag subsidy on cement import to check price hike.
Decline in demand may be attributed to engagement of several thousand workers in wheat harvest, slow down in the construction work, price stabilisation and, moreover, enhanced supply following completion of expansion work in companies.
Cement dispatches showed strong growth of 18 percent to reach at 1.69 million tons during July 2006. Domestic dispatches increased by 16 percent while exports soared by 45 percent during the month.
Dispatches growth in domestic market was led by 21 percent increase in the northern zone on the back of rising reconstruction activities in earthquake-hit areas whereas demand in the southern zone declined by 2 percent. Exports performance, on the other hand, was driven by the southern zone that exported some 62,000 tons during the month, indicating a rise in exports through sea routes.
An analyst from Invisor said ex-factory cement prices largely remained at June level, ie, Rs 255-270 per bag. Going forward, we may see a slowdown in domestic sales as the monsoon season continues during August.
Capacity additions of Pakistan cement amounting to 7,000 tons per day (tpd); Lucky cement, 4,000 tpd, in south; and Attock cement, 3,300 tpd, would start commercial operations during the month that will reduce utilisation levels for the industry. Cement prices are expected to show downward trend in coming months, the analyst added.