Cement prices harden, India

Cement prices harden, India
Published: 04 April 2006

Cement prices have started hardening over the past two days. Several major cement companies have raised prices and intend to increase them again very soon. “Our prices have gone up by Rs 5 to Rs 7 per bag in the last two days,” N. Srinivasan, MD of India Cements Ltd told The Telegraph. “Demand in the South has gone up tremendously in the past few months. Most of the production is close to capacity. In the last few years, there has been a huge cost escalation for the cement companies and we have not passed on the burden to the customers. Now, faced with a huge cost escalation, we are being forced to hike prices.” Srinivasan hinted that prices could go up further.

The price per 50-kg bag of cement in Mumbai is expected to go up to anywhere between Rs 220 and Rs 225. In the south, the prices are close to Rs 250. “Last month, prices in Mumbai were hovering around Rs 205 on an average,” said an industry analyst.

“Prices keep going up and down,” said A.K. Jain, executive director of ACC Ltd. “Price hikes follow different patterns in different parts of the country. We cannot give the exact all-India figures.” He, however, denied that ACC had any immediate plans to raise prices.

According to industry analysts, cement prices have moved up in all markets over the past three months. The cement industry has also shown double-digit growth in terms of volumes. “These two factors have given better pricing power to the producers,” an industry analyst said. The market expects the prices to remain firm in the next two months. “There is so much demand from the infrastructure sector that even a hike in price is not going to dampen any future project,” said an analyst.