Indian cement prices forecast to rise 5%

Indian cement prices forecast to rise 5%
Published: 19 February 2010

Producers in north India are likely to hike prices up to 5% or Rs10-12/50kg bag early next month, the second time this year, on the back of robust infrastructure construction. Furthermore, there is a temporary demand-supply mismatch due to shortage of rail wagons.

Prices had risen 3-5% in the last one month as top producers reported high demand for cement. “Demand for cement from infrastructure sector is growing annually at 15%, which is causing prices to move upwards. Also, some new capacities, which were expected to go on-stream early this year, did not come up thereby leading to demand-supply gap,” Ernst & Young partner Nitin Gupta said. Key players in the north region include Jaypee, ACC, Shree Cement, JK Lakshmi Cement and Dalmia Cement.

Another factor which is pushing up prices is logistics. “Wagons required to transport cement is unavailable, which is not allowing supply to match demand,” said Shailendra Chouksey whole time director at JK Lakshmi Cement. He said prices may move up further next month if such anomalies continue to exist.

Cement prices in the country, at least in the short run, are determined by local factors and differs across regions due to transportation costs and spread of cement factories across India.