KARACHI: Cement prices in the north region of Pakistan have increased by Rs10 per bag to an average of Rs605-615 per bag with effect from May 29, 2021, on the back of rising coal and fuel (mainly furnace oil) prices, market analysts said.
Currently, coal prices are being traded at around $108 per ton compared to $60 per ton in October 2020 and $87 per ton in the start of January 2021. Coal is used as a fuel in the Kiln process of cement manufacturing.
Every $1 per ton increase in coal prices generally increases cement manufacturers cost by Rs1 per bag to maintain margins.
Furnace oil has also increased from Rs55,000 per ton in October 2020 to more than Rs71,000 per ton as of today.
Furnace oil is used to meet power requirements in cement manufacturing.
The analysts said manufacturers will be required to further increase cement prices by Rs30-40 per bag over the next couple of months to pass on this cost.