Pakistan cement sales seen subdued in Sept but poised for rebound on post-flood rebuilding

Cement sales in Pakistan are expected to remain subdued in September but are likely to rebound once post-flood rehabilitation projects, including housing and infrastructure reconstruction, gain traction, analysts said.

Industry experts also point to the government’s plan to build smaller dams to prevent future flooding and increase water storage, which would boost farm yields and drive construction demand.

An analyst at Taurus Securities said cement demand should pick up as rehabilitation work advances, supported by incentives announced in the FY26 budget. The government allocated PKR 10 billion in mark-up and housing subsidies—split equally—to support the construction of affordable housing. In addition, proportionate tax credits have been introduced on profit from loans taken to build or acquire houses up to 250 square yards or flats of 2,000 square feet or less.

“These measures, along with improving macroeconomic indicators, are likely to drive construction activity,” the analyst said.

An analyst at Arif Habib Ltd. said that while demand may face temporary suppression due to flooding in the immediate term, activity is expected to pick up post-monsoon as infrastructure and private housing projects accelerate.

Exports remain strong

Export momentum is expected to remain firm, buoyed by Pakistan’s competitive clinker pricing in regional markets, while stronger domestic demand will support higher plant utilization, analysts added.

Cement dispatches reached 3.8 million tons in August, up 12% from the same month last year, driven by growth in both local and export volumes. Domestic sales rose 10%, while exports climbed 22%, largely due to a low base in August 2024.

Local dispatches saw particularly strong growth in the South, up 20% year-on-year, while the North posted a 9% rise. On the export side, shipments from the South surged 32%, while the North remained broadly flat.