Cement makers have raised retail prices by about 15 per cent in February following a recent court ruling restricting the loading of cement on trucks, and prices could rise further in March, dealers said on Thursday.
Rising investment in houses and roads has also helped prices.
Retail cement prices have gone up to about Rs 214 ($4.8) per 50-kg bag in Mumbai from Rs 186 in early February, while in Delhi the prices have risen to Rs 205, dealers said.
"Companies raised prices twice in February and they should be raising (them) by another Rs 10 to 15 in March," Sanjay Ladiwala, a leading dealer in Mumbai, said.
India has about 55 big cement makers running some 365 plants with a capacity to make 152 million tonnes a year. |Go to Sify Business Home Page|
"Cement companies were not able to pass on the increased fuel, freight and raw material costs in the past six months. Strong demand is helping us now raise prices," M.K Singhi, executive director at Shree Cement Ltd. said.
In early January, India’s Supreme Court imposed a ban on overloading of cement on trucks, putting an additional freight cost of Rs 8-10 per bag, Singhi said.
Cement makers had raised prices by nearly 6 per cent in the December quarter, but the increase was lower than the rise in costs of fuel, freight and raw materials.
Demand, growing at more than 10 per cent a year, has helped top cement companies such as Associated Cement Companies Ltd. Gujarat Ambuja Cements Ltd. and Grasim Industries Ltd. to lift production to peak levels.
"Demand should remain firm at least until June and I don’t see prices easing now," Singhi said.