The average cement price in India declined by 7.3 per cent YoY in December mainly due to weak demand, according to a report by Reliance Securities published in the Economic Times (India).
The national average price of cement dropped to INR285-290 (US$4.28-4.36) per bag last month, compared to INR308/bag in December 2014, according to the report.
Prices in the northern and western regions saw the biggest correction of between 10-12 per cent. In the eastern and central regions, the decline was limited to 6-10 per cent. However, prices remained firm in southern market with the exception of Andhra Pradesh and Telangana states despite poor construction activity. The region in fact witnessed a marginal 1.4 per cent jump in prices from INR345/bag in December 2014 to INR350/bag in December 2015, the report said.
Prices in the western region were down by seven per cent a month on month basis as most areas witnessed a severe correction due to low activity and a volume push, it said.
The demand environment continued to remain dismal mainly due to the absence of a pick-up in the private investment cycle, labour and water issues in many pockets, a negligible recovery in real estate activity, and a delay in regulatory clearances across the country, Reliance Securities Research Analyst, Binod Modi, said.
Cement prices are expected to recover from this month as most of the dealers believe that prices have bottomed out and price hikes have been indicated in the years to come. Nevertheless, demand scenario is expected to pick up from 2016-17, he added.