India May production rises

India May production rises
Published: 16 June 2010

Cement production in India increased 9.18% in May to touch 14.5Mt against 13.28Mt in May 2009, reflecting the strong momentum in the construction and infrastructure works in the country.

According to data compiled by the Cement Manufacturers’ Association (CMA), total dispatches grew at a slightly slower pace of 8.8% to 14.21 MT in the month under review compared with 13.06Mt of sales recorded in the same month a year ago. However, on a month-on-month basis, both production and sales were down, reflecting the impact of monsoon. During May, total production and despatches stood at 14.69Mt and 14.44Mt respectively. Cement sales have historically been lower during the monsoon season as construction activity tends to decelerate.Cumulative production in the last two months, however, continues to show strong growth.

 Total production in the first two months of the current fiscal stood at 29.19Mt against 26.68Mt in the April-May period of the last fiscal while despatches grew to 28.65Mt from 26.32Mt over the same period.But on a sequential basis, the demand is slowing down which is also reflected from the fact that prices have weakened for second consecutive month in June.

The slump is more evident in the southern markets, especially in Andhra Pradesh where prices are down by INR50-60 per bag from its peak two months back. Cement prices in Chennai, too, have declined by INR15-20 per bag in the last couple of months. In the north, where prices have been firm on demand from commonwealth game projects, prices have seen INR5-10 softening in June.