India cement prices show no sign of softening

India cement prices show no sign of softening
Published: 09 February 2010

Cement prices in India are again rising. After a series of increases since November, a fresh round of price increases, effective from February 1 by almost all manufacturers has pushed the rate up by Rs 3-5 for a 50 kg bag, pushing the average national price to about Rs 235. In November, the average rate was Rs 210-215 a bag.

Dealers and companies’ sources told Business Standard that on the back of better than expected growth in demand, the market has the capacity to absorb the latest hike. And, the say, there is further room for a similar rise during the peak construction season.

ACC, Ambuja, UltraTech and Grasim, said dealers, have increased rates by Rs 4-5, while small regional companies have managed to push up the price by at least Rs 3 a bag.

Industry experts said the unexpectedly high demand for cement, which hit double-digit growth in December and is likely to see the trend continue for some months, has kept at bay the earlier apprehensions of less growth in the second half of the current financial year, on the back of a high base effect on a year-on-year basis.

In Mumbai, the country’s largest cement consumption centre, prices are at Rs 255 a bag. Real estate and other construction activities have visibly picked up in Mumbai, enabling companies to find buyers even at higher prices, said analysts.