India: cement cos to hike prices again despite low demand

India: cement cos to hike prices again despite low demand
Published: 15 October 2010

Cement makers seem to be on a spree to hike prices of the commodity despite sluggish demand. In less than a fortnight after increasing price by INR20/ 50kg bag mostly in western and southern India, cement companies have intimated dealers and stockists about another INR15-20/bag hike almost across the country from Dussehra, October 17.

The proposed hike goes against the common practice of keeping prices unchanged during Dussehra and Diwali when construction activities typically dip.

"Despite the usual observation that during festive season of Dusshera and Diwali construction activity is lower as most workers move back to their native places, cement companies have informed us about this hike. Even if they don’t get to push this one, it will at least help in sustaining the earlier one," said a large Jodhpur-based stockist.

However, according to stockists, the companies may not be able to sustain this hike as demand is weak and is likely to remain sluggish for the next one more month.

In Rajasthan, if the hike is implemented, price will be INR200 in non-trade segment from INR190 now, while INR225 in trade segment from the current INR210.

In the key market of Mumbai, prices of the commodity are likely to be hiked by around INR10 pushing prices to INR245 per bag in non-trade segment and Rs265 in the trade segment. Delhi, which has already seen a hike of INR20 in cement prices a week ago, is set to witness another increase of INR20, dealers said.

In Gujarat, the quantum of hike with INR5/ bag will be the lowest among all regions. In Chennai and Hyderabad also, cement makers have intimated stockists about a INR20-hike from Sunday.

In south India, prices of the commodity have gone up almost INR100 per bag in the past one month despite weak demand and excess supply. According to industry experts and analysts, these price hikes so far have been managed though production discipline among cement makers. However, the region is now clearly in an excess supply scenario.

Most of the cement makers including large players such as ACC, Ambuja Cements, UltraTech Cement, India Cements, Jaiprakash Associates, Dalmia Cement Bharat, Binani Cement, and JK Lakshmi Cement have announced these hikes, stockists said.