New Delhi: The cement sector is likely to witness negative growth in sales in October due to a slowdown in infrastructure construction activities amid the festive season, besides the higher base in the corresponding month last year, a brokerage firm has said.
“Given last year’s higher base and the upcoming festival season (Diwali), the cement industry is expected to report negative year-on-year growth in dispatches for the month of October, 2011,” Elara Securities said in a report.
In September, the country’s cement firms reported a marginal 1.4% decline in dispatches vis-a-vis the same month last year. In August, cement dispatches were down by 6.6% in comparison to July.
Laborers unloading cement bags from freight trains at the Shakur Basti station in New Delhi. Bloomberg.
Industry sources said the unavailability of sand has impacted cement offtake in the Western region, while the monsoon and the fluid political situation hit sales in Andhra Pradesh.
“As cement demand is still subdued, cement players have cut down supply in the low price non-trade segment. Thus, cement prices during the month increased in most parts of the northern, eastern, western and central regions by Rs 5-30 per 50 kg bag,” it said.
Cement prices in the southern region (except Andhra Pradesh) remained flat, as cement demand was weak due to festivals like Onam and Dussehra. Prices in Andhra Pradesh have inched up by Rs 10 per bag due to the Telangana agitation.
“Cement dealers expect prices to inch up further by Rs 5-10 per bag in most regions,” Elara Securities said.