Sky-rocketing coal prices, squeezed supplies and other similar issues have caused a surge in cement prices that has subsequently led to an increased cost of construction.In the last 60 days (since Jan 15), the per-bag cement price has increased by Rs160 and it may further jump by another Rs200 in the retail market within the next 30 days or so.
“In January, the per-bag price was Rs690 that has now reached Rs850. It is likely to touch Rs1,050 if the coal supply crisis prolongs,” Muhammad Wasiq, a leading cement dealer in Lahore.
There are 25 cement factories in the north and south of the country with an adequate manufacturing capacity to meet domestic demands.
“Both electricity and coal make up about 50 to 65pc of the total cost incurred on cement production,” an industry source explained.
He said the price of coal being imported from South Africa, Indonesia, Ukraine and other western countries once surged to $500 per tonne, forcing traders to halt the imports. Later, the price gradually started decreasing. But still, the per-tonne price of $375 was very high. “In 2003, the per-tonne coal price was just $35,” he said.