Pakistan Cement industry rebounds amid volatile Global Conditions

ISLAMABAD: Pakistan’s cement sector is showing signs of recovery in FY26 despite growing uncertainty in the global macroeconomic environment. The industry’s performance in the first nine months reflects a strong domestic turnaround, shifting away from heavy reliance on exports.

Cement Prices Remain Elevated in Pakistan

As of early April 2026, cement prices in Pakistan remain high:

• PKR 1,350 to PKR 1,500+ per 50kg bag nationwide
• Northern region (Punjab/KP): PKR 1,375–1,450
• Southern region (Sindh/Balochistan): Similar range

Domestic Demand Drives Growth

Total cement offtake during 9MFY26 recorded a 10% increase, primarily fueled by an 11% surge in local demand, while exports contributed a modest 6%. This shift toward the domestic market has supported profitability, as manufacturers enjoy better pricing power locally compared to competitive international markets.

Capacity Expansion Limits Utilization

Despite improving demand, the industry continues to face a capacity overhang. Average domestic monthly demand has climbed to around 3.9 million tons, recovering from the seven-year low in FY25. However, total production capacity has expanded to nearly 65 million tons, marking a 22% increase since FY21.

As a result, capacity utilization remains below 60%, indicating that supply still significantly exceeds demand.

Cross-Border Challenges Add Pressure

Ongoing cross-border tensions with Afghanistan are further complicating export routes, increasing reliance on the domestic market. Although government-backed mortgage subsidies aim to support construction activity, rising costs may discourage potential homebuyers.