Indian cement prices fall as demand slows

Indian cement prices fall as demand slows
Published: 09 December 2008

With the spectre of a major slump in demand looming over the peak supply season, cement makers across India have been forced to cut prices in a bid to revive demand.

In Mumbai, wholesale prices are currently between Rs 244 and Rs 248 per 50-kg bag, down from Rs 253 during the Diwali season. Cement manufacturers, including biggies like UltraTech and ACC, started offering discounts a month ago. A cement stockist said all the players have since reduced prices.

Even so, demand shows no sign of revival. The December to May period is considered to be the peak season for cement sales and a decline of nearly Rs 9 in prices going into the season may indicate the state of the housing and construction industry in the region. Other regions aren’t doing any better.

In Kolkata, which had seen wholesale prices fall by Rs 4 to Rs 248 per bag in mid-October, there has been a further reduction of Rs 5-9 since then. A Kolkata-based dealer said biggies, including Lafarge, ACC and UltraTech, slashed prices by Rs 7-10 for wholesale buyers. In fact, UltraTech has reduced prices by Rs 10 to Rs 239 per bag, forcing smaller players to follow with reductions of Rs 13-18. But, even this has failed to stir demand.

In north India, which gets its supply mainly from Gujarat and Rajasthan, prices have fallen by over Rs 10. Prices have come down to Rs 200 per bag in the Jaipur region and to Rs 225 per bag in Delhi and nearby states. Local player Binani Cements, which commands a market share of 6% in the region, is facing cost pressures.