The average price of cement, which stands at INR280 per bag (US$5.36) of 50kg, may go up by between INR3-6 per bag in the current month on increased construction activity, according to report by Crisil Research.
"Post the festive season, the construction activity and consequently cement demand will gain traction, which could lead prices to rise by 1-2%, on a MoM basis, in November, 2011," Ajay D’Souza, Crisil Research head said.
The average retail price of cement in the country rose by about 6% MoM to INR280 per bag in October 2011.
"Notable price hike in the Northern region in October, 2011, largely supported the pan-India price increase," he said, adding that on a yearly basis, the average pan-India retail cement price recorded an increase of almost 15 per cent during the month.
D’Souza said the domestic consumption of cement in October remained almost flat resulting in just three per cent increase in demand during the April-October period of the current fiscal.
"The subdued pace of construction activity in real estate and infrastructure segment is largely instrumental for this lacklustre demand," he said.
India’s total consumption of cement in October this year was 18.1Mt, just 0.6% up over the same month last year. It consumed 123Mt cement during the April-October period of the current fiscal.