Cement Sales Likely to Fall in November 2020: Report

Cement Sales Likely to Fall in November 2020: Report

A report released by the brokerage house, Topline Securities, on Tuesday stated, that winters will have an impact on cement sales in the month of November 2020, whereby the local sales are likely to decline by 23 percent to 27 percent month over month. However, despite this monthly decrease, the sales will be up from last year’s similar time period, to the tune of 2 percent to 6 percent.

The report also said that the north region in the country is expected to witness a higher rate of contraction, approximately 25 to 29 percent, while sales in the south will likely fall by around 11 to 15 percent.

According to the equity research company experts,

This is the case because of restricted development work in the North region due to the early onset of the winter season and an increasing number of COVID-19 cases. That said, the local sales are likely to be still up 2 to 6 percent YoY during Nov-2020.

On the export side as well, the cement sector will likely see a decline of 1 to 3 percent on a monthly account, but an increase of 6 to 8 percent on an annual comparison.

The report stated, “Industry utilization in Nov-2020 is expected to clock in at 82 percent vs. Oct-2020 utilization level of over 100 percent (adjusted for dead capacities of Flying Cement, Dewan Cement Hattar and Dandot Cement).

The company-wise break down of the seasonal shift in cement sales, by Topline Securities show Lucky cement to remain among the winning companies with a projected increase of 23 percent on a year over year basis, while Fauji Cement Company Limited is projected to lose around 14 percent of their previous year’s sales.

About the expected sale price of cement, the report predicted prices in the North region during Nov-2020 to average Rs. 545 per bag, and in the South region at Rs. 611 per bag.