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Construction and Manufacturing Driving Double-Digit Growth in Pakistan Cement and Steel Production

RiazHaq

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Pakistan steel production grew by 13.3% in 2020, the second fastest among the top 40 steel producing countries, according to data published by the World Steel Association. At the same time, Pakistan Bureau of Statistics revealed that the nation's steel imports rose by 18% year-over-year. The demand for steel was driven by construction and manufacturing sectors which are leading Pakistan's economic recovery.

Pakistan steel-makers produced 3.7 million tons of steel in 2020, up 13.2% from 3.2 million tons in 2019. Neighboring India saw 10.6% decline in steel production in the same period. Global steel production declined 0.9% in 2020. Pakistan also imported $2.1 billion worth of iron, steel and scrap in the first 7 months (July 2020- January 2021) of the current fiscal year. It's a jump of 18% from the same period in prior fiscal year. Pakistan steel industry reached peak production of 5 million tons in 2017 before declining to 4.7 million tons in 2018 and 3.3 million tons in 2019.
Construction boom helped Pakistan grow its domestic cement consumption by 17% in the first 7 months (July 2020-January 2021) of the current fiscal year. Domestic cement sales rose to 27.65 million tons in this period, while exports grew by 10.23% to 5.71million tons from 5.186 million tons in the same period last year. The total cement sales (local and exports) were 33.36 million tons, up 15.77% over the corresponding period of the last fiscal year.
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Norwegian

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Pakistan steel production grew by 13.3% in 2020, the second fastest among the top 40 steel producing countries, according to data published by the World Steel Association. At the same time, Pakistan Bureau of Statistics revealed that the nation's steel imports rose by 18% year-over-year. The demand for steel was driven by construction and manufacturing sectors which are leading Pakistan's economic recovery.


Pakistan steel-makers produced 3.7 million tons of steel in 2020, up 13.2% from 3.2 million tons in 2019. Neighboring India saw 10.6% decline in steel production in the same period. Global steel production declined 0.9% in 2020. Pakistan also imported $2.1 billion worth of iron, steel and scrap in the first 7 months (July 2020- January 2021) of the current fiscal year. It's a jump of 18% from the same period in prior fiscal year. Pakistan steel industry reached peak production of 5 million tons in 2017 before declining to 4.7 million tons in 2018 and 3.3 million tons in 2019.
Construction boom helped Pakistan grow its domestic cement consumption by 17% in the first 7 months (July 2020-January 2021) of the current fiscal year. Domestic cement sales rose to 27.65 million tons in this period, while exports grew by 10.23% to 5.71million tons from 5.186 million tons in the same period last year. The total cement sales (local and exports) were 33.36 million tons, up 15.77% over the corresponding period of the last fiscal year.
Related Links:
Haq's Musings
South Asia Investor Review
Pakistan to Become World's 6th Largest Cement Producer By 2030
Naya Pakistan Housing Program
Pakistan's Response to COVID19 Pandemic
Pakistan Tech Exports
Pakistan Digital Economy Surged 69% Amid Covid19 Pandemic
Soaring Food Prices Hurting Pakistanis
Najam Sethi on Desperation in PDM Ranks
India's Firehose of Falsehoods Against Pakistan
Pakistan Launches Defense AI Program
Riaz Haq's Youtube Channel

PakAlumni Social Network



As long growth in real estate doesn't lead to massive imports, everything will be fine.
 

Indus Pakistan

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As long growth in real estate doesn't lead to massive imports, everything will be fine.
I don't think it will as long as most of the construction is housing for the lower income groups. Most of the inputs will be local.

However beyond the obviously good news is a depressing fact. Iran and Turkey produce 10/12 times more steel. And India produces 30 times more. Thirty times .....
 

Indus Pakistan

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When I read "Pak auto industry" as -

  • Tota
  • Honda
  • Hinopak
  • Chang
  • SuzukiPak
  • NisanPak
  • KiaPak
  • Paktak
  • Saktak
  • Kotapak
  • Pakpak
It's scary. There appears to be dozen players which raises the question how many autos each are "making". Given small gross figures the numbers each must be making are probably same as a village darzi sews shalwar kameez. This has to be inefficient and not enjoy economies of scale. I know in UK plants that produced 1/4 million cars which is bigger then entire Pakistan market have closed down because they could not comepte against plants that churned out million cars.

So it is here. Most countries will have one, maybe two or three steel giants each pumping out 10s of millions tons of steel. In Pakistan I again see the same inefficient pattern emerging. Half a dozen companies which raises the question how much does iron or steel does each produce? Same as a village blacksmith?
 

Kabira

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Pakistan steel production grew by 13.3% in 2020, the second fastest among the top 40 steel producing countries, according to data published by the World Steel Association. At the same time, Pakistan Bureau of Statistics revealed that the nation's steel imports rose by 18% year-over-year. The demand for steel was driven by construction and manufacturing sectors which are leading Pakistan's economic recovery.


Pakistan steel-makers produced 3.7 million tons of steel in 2020, up 13.2% from 3.2 million tons in 2019. Neighboring India saw 10.6% decline in steel production in the same period. Global steel production declined 0.9% in 2020. Pakistan also imported $2.1 billion worth of iron, steel and scrap in the first 7 months (July 2020- January 2021) of the current fiscal year. It's a jump of 18% from the same period in prior fiscal year. Pakistan steel industry reached peak production of 5 million tons in 2017 before declining to 4.7 million tons in 2018 and 3.3 million tons in 2019.
Construction boom helped Pakistan grow its domestic cement consumption by 17% in the first 7 months (July 2020-January 2021) of the current fiscal year. Domestic cement sales rose to 27.65 million tons in this period, while exports grew by 10.23% to 5.71million tons from 5.186 million tons in the same period last year. The total cement sales (local and exports) were 33.36 million tons, up 15.77% over the corresponding period of the last fiscal year.
Related Links:
Haq's Musings
South Asia Investor Review
Pakistan to Become World's 6th Largest Cement Producer By 2030
Naya Pakistan Housing Program
Pakistan's Response to COVID19 Pandemic
Pakistan Tech Exports
Pakistan Digital Economy Surged 69% Amid Covid19 Pandemic
Soaring Food Prices Hurting Pakistanis
Najam Sethi on Desperation in PDM Ranks
India's Firehose of Falsehoods Against Pakistan
Pakistan Launches Defense AI Program
Riaz Haq's Youtube Channel

PakAlumni Social Network



Damn Pakistan is pretty bad. Even behind Bangladesh in steel production.
 

RiazHaq

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Economic indicators, social spending on upward trajectory



The Pakistan Tehreek-i-Insaaf (PTI) government has started yielding results in the form of improved economic indicators which was providing necessary cushion to further strengthen the social safety nets.

The government managed to put the economy back on track by introducing financial discipline and taking politically tough and unpopular decisions. “Putting the economic indicators back on the positive trajectory was a herculean task for the present government as it inherited an economy with a major balance of payment crisis which led to high inflation and low growth,” said a press release issued on Monday.

The Large Scale Manufacturing (LSM) has shown significant growth so far in the current fiscal year. The LSM grew by 7.4 percent in October and 14.5 percent in November which was the highest monthly growth in twelve years. The manufacturing recovery was also becoming broader with 12 out of 15 sub sectors registering positive growth leading to employment generation, officials say.

The incentives given to the industries including the construction sector have triggered an economic activity in the country, it said. It further said that with the industries operating at its full capacity, there has been a significant increase in the exports and the exports reached to $2.3 billion in December 2020, highest in seven years.

The exports of textile industry, it added went up by US $1.4 billion in December 2020, thus achieving the highest ever growth for any month and cement sale witnessed highest ever sale in October 2020.

Regardless of debt servicing of about US $10 billion annually, the foreign exchange reserves have reached about US $ 20 billion, highest since January 2018.

It further said that commercial bank deposits have witnessed highest growth in eighteen years. The current account has shown a surplus of US $1.6 billion during first five months of current financial year against a deficit of $1.7 billion in the corresponding period last year.

There has also been the lowest rise in the external debt in the financial year 2020 and that the loans taken by the present government were used to retire the ones taken by the previous governments.

“Pakistan’s improved ranking in the Ease of Doing Business index and the steps taken to facilitate the investors will also attract both foreign and domestic investments,” it said adding that apart from bringing improvement in economy, the government was also focusing to provide relief to the disadvantaged segments of the society.”

The budget of Ehsaas program has been doubled if compared with that of the year 2018. The cash assistance provided to millions of deserving families in most transparent manner in the wake of Covid-19 outbreak helped to protect and mitigate the sufferings of vulnerable segments of society.

Similarly, the Sehat Sahulat Cards scheme was being implemented on fast track basis both in Punjab and Khyber Pakhtunkhwa provinces which will bring a visible change in the lives of the people.
 

SoulSpokesman

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Kaptaan sb,

However beyond the obviously good news is a depressing fact. India produces 30 times more. Thirty times .....

Actually the size of the domestic steel industry is of little importance to Pak economy. It doesnt have large domestic iron ore or coking coal reserves and for that reason it will never be a large producer of steel; nor does it even need to. As long as it can run downstream industries (which use steel and steel products as raw materials) efficiently.

Regards
 

Kingslayerr

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Kaptaan sb,

However beyond the obviously good news is a depressing fact. India produces 30 times more. Thirty times .....

Actually the size of the domestic steel industry is of little importance to Pak economy. It doesnt have large domestic iron ore or coking coal reserves and for that reason it will never be a large producer of steel; nor does it even need to. As long as it can run downstream industries (which use steel and steel products as raw materials) efficiently.

Regards
Yar these alsobthe fact that these countries had a constant growth for the last 2 decades while we at that time were going towards a civil war.
But now thing's are changing the war is not affecting us as it was in 2006-2013. I remember we use to not go out in public places due to the fear of bomb blasts. It wont be so easy but Pakistan can still take over atleast bangladesh in terms of economy.
 

Indus Pakistan

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However beyond the obviously good news is a depressing fact. India produces 30 times more. Thirty times .....
And I said so earlier. Yes, you are right that Pakistan is hamstrung by not having any viable iron ore or coking coal but neither does Japan but it still built up a vast steel industry. Thus it is possible although you need to be super efficient to pull this off.
 

Kabira

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First Chinese company in Rashakai SEZ



ISLAMABAD: The government on Thursday allocated 40 acres of land in the Rashakai Special Economic Zone (RSEZ) in Khyber Pakhtunkhwa to a Chinese-owned steel company. In a meeting, the SEZ Committee of Rashakai Special Economic Zone allocated this land to Century Steel (Pvt) Ltd, which is owned by Fuzhou Julitaihe International Company. The company owns steel mills in Indonesia, Myanmar, Cambodia and Ethiopia with the net capacity of three billion tons of iron and steel products. The Century Steel has planned to invest $50 million and will produce 0.25 million tons steel products at their plant in the Rashakai SEZ. The project would consume 45 megawatts of electricity and employ 1,000 manpower directly and indirectly, resources from China have been mobilised and Chinese engineers and personnel have been setting up a site office to execute the project without delay. This is a momentous day for the industrialisation of KP as the first zone enterprise from China has been admitted to the Rashakai SEZ.


Small investment but if all goes well it will expand. Pakistan should look to increase production to 8-10 million tons by 2025.
 

ZeEa5KPul

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Pakistan steel production grew by 13.3% in 2020, the second fastest among the top 40 steel producing countries, according to data published by the World Steel Association. At the same time, Pakistan Bureau of Statistics revealed that the nation's steel imports rose by 18% year-over-year. The demand for steel was driven by construction and manufacturing sectors which are leading Pakistan's economic recovery.


Pakistan steel-makers produced 3.7 million tons of steel in 2020, up 13.2% from 3.2 million tons in 2019. Neighboring India saw 10.6% decline in steel production in the same period. Global steel production declined 0.9% in 2020. Pakistan also imported $2.1 billion worth of iron, steel and scrap in the first 7 months (July 2020- January 2021) of the current fiscal year. It's a jump of 18% from the same period in prior fiscal year. Pakistan steel industry reached peak production of 5 million tons in 2017 before declining to 4.7 million tons in 2018 and 3.3 million tons in 2019.
Construction boom helped Pakistan grow its domestic cement consumption by 17% in the first 7 months (July 2020-January 2021) of the current fiscal year. Domestic cement sales rose to 27.65 million tons in this period, while exports grew by 10.23% to 5.71million tons from 5.186 million tons in the same period last year. The total cement sales (local and exports) were 33.36 million tons, up 15.77% over the corresponding period of the last fiscal year.
Related Links:
Haq's Musings
South Asia Investor Review
Pakistan to Become World's 6th Largest Cement Producer By 2030
Naya Pakistan Housing Program
Pakistan's Response to COVID19 Pandemic
Pakistan Tech Exports
Pakistan Digital Economy Surged 69% Amid Covid19 Pandemic
Soaring Food Prices Hurting Pakistanis
Najam Sethi on Desperation in PDM Ranks
India's Firehose of Falsehoods Against Pakistan
Pakistan Launches Defense AI Program
Riaz Haq's Youtube Channel

PakAlumni Social Network



Holy... China's steel production is in its own order of magnitude.
 

RiazHaq

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Kaptaan sb,

However beyond the obviously good news is a depressing fact. India produces 30 times more. Thirty times .....

Actually the size of the domestic steel industry is of little importance to Pak economy. It doesnt have large domestic iron ore or coking coal reserves and for that reason it will never be a large producer of steel; nor does it even need to. As long as it can run downstream industries (which use steel and steel products as raw materials) efficiently.

Regards
Yes, agreed!

But let's also talk about China producing 10 times more steel than India when both have about the same population!
I don't think it will as long as most of the construction is housing for the lower income groups. Most of the inputs will be local.

However beyond the obviously good news is a depressing fact. Iran and Turkey produce 10/12 times more steel. And India produces 30 times more. Thirty times .....
Yes, agreed!

But let's also talk about China producing 10 times more steel than India when both have about the same population!
 

RiazHaq

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#Construction Boom in #Pakistan: #Cement sales soar 14% to 37.95 million tons in first 8 months of current fiscal year, up from from 33.31m tons in the same period last fiscal year. #Exports also grew 6.62% to 6.33m tons from 5.94m tons in 8MFY20. #COVID19 https://www.dawn.com/news/1610422

Overall cement sales posted a growth of 14 per cent to 37.95 million tonnes in 8MFY21 from 33.31m tonnes in the same period last fiscal year.

Local dispatches increased by 15.51pc to 31.62m tonnes in 8MFY21 from 27.37m tonnes in the same period last year. Exports also grew 6.62pc to 6.33m tonnes from 5.94m tonnes in 8MFY20.

As per data of the All Pakistan Cement Manufacturers Association (APCMA) released on Tuesday, North-based mills dispatched 26.82m tonnes for domestic consumption during 8MFY21, a jump of 15.29pc compared to the same period last year which was 23.26m tonnes. Exports from North were 1.63m tonnes, down by 9.83pc from 1.81m tonnes during the same period of last year.

South-based mills dispatched 4.79m tonnes in the domestic market during 8MFY21 which was 16.73pc higher than 4.11m tonnes dispatched during the corresponding period of last year. Exports from South were 4.70m tonnes, depicting a rise of 14pc over exports of 4.13m tonnes during the same period last year.


Rising cost of electricity and coal have led to increase in the cost of cement production, which is becoming difficult for the cement industry to absorb, a spokesperson for the APCMA said.

In February, cement sector showed 2pc growth to 4.577m tonnes as compared to 4.489m tonnes during Feb 2020.

Local cement dispatches in February witnessed a 6pc hike to 3.961m tonnes as compared to 3.735m tonnes in the same month of 2020. Exports continued a declining trend as seen during the last three months. Total exports dropped by 18.24pc from 753,444 tonnes in Feb 2020 to 616,030 tonnes in February.

During February, the North-based factories sold 3.28m tonnes locally, up by three per cent from 3.17m tonnes in Feb 2020, while sale of South-based mills stood at 683,384 tonnes for local consumption which was 21.49pc higher than 562,501 tonnes in Feb 2020.

Exports from North-based mills decreased by 7.71pc to 186,595 tonnes in February from 202,181 tonnes in Feb 2020 whereas the exports from South decreased by 22pc to 429,435 tonnes in February from 551,263 tonnes during the same month last year.

According to Topline Securities, cement prices averaged at Rs601 per 50kg bag in the Northern region while prices remained unchanged at Rs610-615 in the Southern region.
 

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