Cement prices rise ahead of peak construction season

[LahoreEstate]

By Moonis Ahmed

KARACHI: Ahead of the peak construction season (February to August) in the country the cement prices have climbed up in the local market, Daily Times learnt Thursday.

Retailers and dealers said that local cement prices have started to rebound gradually as expected and are up by Rs 10 to 15 per 50 kg bag from last week. The 50 kg cement bag is currently available in the band of Rs 250 to 260 in the northern region as compared to Rs 240 to 245 last week and Rs 290 to 300 in the southern region, they said.

While cement prices started escalating in the market, they blame the manufacturers for the increasing rates ahead of rising demand during the said period. Retailers said upon buying supplies and raw materials at higher rates, it is impossible to sell them to the consumer at lower prices and inevitably suffer from the augmented rates. The rising transportation cost after increase in fuel prices has further contributed in pushing up the prices.

The prices have been raised by Rs 10 to 15 by some manufacturers after witnessing improvement in demand in the northern region, Shehzad Ahmed, Secretary, Karachi Cement Dealers Association said.

He said that the cement demand has been average and after witnessing consistent fall in export the manufacturers deliberately have pushed up prices in the local market.

An official of All Pakistan Cement Manufacturers Association (APCMA) on the condition of anonymity said that the recent hike in power and gas by almost 12 percent and 18 percent basically have a cumulative impact of 20 to 25 percent on all other allied industries. The cement prices may witness further increment in near future, he said.

“The hike in utility charges and high cost of production are the main reasons that have made it unviable for the manufacturers to run their plants”, he said adding that some of the plants closed couple of months ago due to aforementioned factors which have still not been regularized.

Chairman Association of Builders and Developers, Farooq- Uz-Zaman Khan said that the construction industry is suffering from a critical period mainly because of high cost of doing business.

He added that the cement and steel prices have gone up as compared to last year marking a significant difference in cost of doing business; the cement manufacturers have raised the prices by Rs 10 to 20 per 50 kg bag in the last two to three months.

He said that steel bar price is now quoted at over Rs 56,000 to 57,000 per tonne, which was Rs 40,000 to 45,000 tonnes last year. Besides, there is also an increase in prices of tiles, copper wire, electrical items, steel products, sand and gravel (reti and bajri). “In the last two years, the cost of construction has gone significantly up because of increase in the prices of basic materials used in construction,” he said.

He said the builders were finding it hard to provide a low cost residential flat or a house to their clients in view of rising construction cost. However, there is still genuine buying in market and new projects are being launched. “Almost 30 big housing projects have been launched during last six months”, he said adding that a number of projects are in the pipeline.

On one hand, it is said that the stocks of cement in the country are more than the demand, while on the other side, there has been a slowdown in construction activities because of country’s law and order crisis coupled with ever rising cost of construction, Farooq said.

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