Cement Prices likely to increase after Budget

Cement manufacturers want the government to revisit the budget 2020 proposal to raise FED. Recall that, the budget has raised the FED to Rs100 per a 50-kg cement bag which is incrementally Rs15 on each cement bag sold. Steel manufacturers on the other hand have different complaints, depending on whether they are a steel raw material maker (scraps, billets), or a steel raw material user (steel melting).

One thing is for sure, the new budget has raised costs for many of the manufacturers which they will pass onto the end-user buyers. However, uncertain demand might make that harder. Though the All Pakistan Cement Manufacturers Association (APCMA) has stopped updating its website since March (along with the monthly dispatch numbers—which allowed stakeholders in the market to keep abreast of the sector’s performance), the PBS numbers for April show that cement manufacturing has come down by 4 percent in 10MFY19. In 9M, this was 6 percent, so some improvement was seen in April, evidently, though detailed numbers are not available. Meanwhile, production of long steel has come down by a whopping 25 percent during this period.

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