ISLAMABAD: Pakistan’s cement industry is witnessing a strong revival this fiscal year, led by surging domestic demand. After years of relying on exports, local consumption rose 12 percent in the first eight months of FY26, while exports grew modestly by six percent, now accounting for 18 percent of market share, down from 20 percent last year.

Average monthly domestic offtake climbed to 3.56 million tons, recovering from seven-year lows in FY25. Although still below the peak levels of FY21 and FY22, the trend signals renewed momentum for local producers reclaiming market share.

Industry capacity has expanded to 58 million tons for the eight-month period, roughly 22 percent higher than FY21 and FY22. Capacity utilization, currently at 60 percent, remains below historical highs, highlighting the room for growth as producers work to optimize production.

The domestic market gives cement makers strong pricing power, enabling them to absorb rising costs more effectively than in export markets. The recent spike in global coal prices due to Middle East tensions presents both challenges and opportunities for local producers to adjust pricing without eroding margins.

Regional tensions, particularly along northern export routes with Afghanistan, continue to complicate logistics. Despite these challenges, domestic demand is expected to remain strong, supported by subsidized mortgages and government incentives aimed at reviving stalled construction projects.

Industry analysts say this period offers a crucial window to increase utilization and profitability. Rising domestic demand, strategic policy support, and effective cost management position Pakistan’s cement sector as a key driver of construction-led economic recovery in the coming years.