Indian cement demand growth to decline in 4QFY23-24

India is expected to see a fall in cement demand growth in the final quarter of the current fiscal year (January-March 2024), due to a slowdown in construction activity, adverse weather conditions and uncertainty in the run-up to the elections being held in April and May.

According to Business World India, an increase in supply along with more intense competition has also had an adverse impact on cement prices. Reports suggest that prices have already begun to decline, with reductions of INR2-12/bag (US$0.02-0.14) reported in the opening two months of 2024, a period usually associated with an increase in prices. 

The first nine months of the current fiscal year have seen a 13 per cent increase in cement demand, driven by increased government infrastructure spending, supported by sustained growth in the country’s housing sector. Although this final quarter has brought weakened demand, analysts remain optimistic with forecasts of mid-single-digit per growth YoY in the fourth quarter and an estimated nine per cent growth YoY for the fiscal year as a whole.