A decline is expected in PSX Cement sector as coal prices take a toll on margins and profitability of players.
Source: Google
· Moving forward, the sequential decline is expected to continue into 2QFY22 as coal prices continue to increase, currently trading at USD230/ton against effective price of USD100-110/ton for 1QFY22 while the pass-on remains limited.
Source: Google
· LUCK and MLCF are expected to remain comparatively insulated from increasing coal prices where low cost structure aids however additional buffer for LUCK has been created by increased other income.
Source: Google
· Even though the sector has remained under pressure lately, it as an opportunity to accumulate where an expected decline in coal prices post winter can induce a rally in the sector.
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