Cement prices have witnessed the greatest fall of about 5-10 per cent across India in the last two months. Moreover, in western and southern India, where a large amount of new stock is still arriving, the non-trade prices have been cut by 20-30 per cent to Rs 160-180 a bag.
The overall slowdown, both in domestic and exports demand, coupled with capacity addition, especially in states such as Gujarat, which produces about 20 per cent of country’s total cement, has started a battle in non-trade prices. For places that are close to manufacturing facilities, the prices (non-trade) have been raised to Rs 150-160 a bag by players such as Jaypee Cement and Sparta Cement.
Cement players in Andhra Pradesh have also slashed prices and are reaching out to other states, as infrastructure activities have been hit in the state due to floods.
“It is for the first time since 2005 that we have seen such a huge fall in prices. However, there is no room for further price cut, else companies will have to bear losses. There has been suspended growth and people have postponed purchases hoping that prices will fall further. From next month onwards, we expect a revival in demand leading to a rise in prices,” said Alok Sanghi, director of Sanghi Cement.