Indian demand: signs of gradual pick-up

Indian demand: signs of gradual pick-up
Published: 09 December 2013

Tagged Under: Consumption India 

Indian cement demand is seeing gradual signs of recovery with an uptick in demand being witnessed in a number of states, a sector survey has revealed.

Over the first three quarters of the current calendar year, cement consumption has been subdued and the industry is expected to fall short of the seven per cent demand growth projected at the start of the year.

However, a report by ICICI Securities published in BusinessLine India shows that demand has improved in  Punjab, Harayana, Uttar Pradesh, Bihar and Maharashtra, while other areas are showing initial signs of improvement. However, consumption in Andhra Pradesh and Tamil Nadu is likely to remain weak, the report forecast.

“We continue to maintain our positive stance on the sector and expect demand to pick up on the back of healthy rural housing demand due to a good monsoon, gradual pick up in government infrastructure spends and low base of the past year,” the financial services firm said.

Cement dispatches in November grew by around 3-4 per cent YoY but declined 7-8 per cent MoM to around 18.5Mt. The monthly decline was said to be due to a sand mining ban in Rajasthan which was partially lifted on 26 November, cyclones in Andhra Pradesh and Odisha, assembly elections in Rajasthan, Madhya Pradesh, Chhattisgarh and Delhi as well as the Dewali festive period.

Cement prices have also increased by INR10-15/bag in the north, central and western regions since the start of this month, but remained largely flat in the south and east. The national average price increased by 1-2 per cent MoM.