Indian cement prices expected to rise

Indian cement prices expected to rise
Published: 11 December 2009

Indian cement prices are seen hardening in the Jan-March quarter as demand from state projects picks up and rural housing drives volume growth, industry officials said.

Analysts and company officials expect prices across India to rise following a spate of price hikes already effected by cement makers in southern and western India.

Prices went up by 8-10 rupees for a 50kg bag southern India late November to 155-175 rupees, while a similar hike in Mumbai on Dec. 2 raised prices to 240-245 rupees per bag.

"We expect it to go up 5-10 rupees further in the next few months as construction activity picks up," said Rupesh Sankhe, analyst with Angel Broking, talking about the southern and western markets.

"Producers are able to recover a higher price as demand in the region is growing at 12 per cent now," said N Srinivasan, managing director, India Cements Ltd, a Chennai-based cement producer.

"Earlier there was a fear of surplus capacity but now the market has understood that it is not much and is getting absorbed," he said.

"Prices from January onwards in the northern region will be firming up by 5-10 rupees per bag," said Vinod Juneja, managing director, Binani Cement said.

Government stimulus to reverse the aftereffects of the liquidity crisis perked up construction, boosting demand. November shipments of most cement firms have shown a rise.

Ambuja Cements saw sales rise 5 percent in November and Shree Cement saw a 15.2 per cent rise on year in shipments. (Edited report from Reuters).