Mumbai: Fresh capacity addition will push up cement production by 11.5% in FY 2009, marginally lower than the projected 12% growth in the rate of consumption in the said period, the Centre for Monitoring Indian Economy (CMIE) said in its monthly review.
Last year, cement production grew by a decent 8.1% to 168.3 million tonnes, while consumption grew faster by 10.1%.
According to the report, cement prices in the northern region softened in May but remained steady in the southern region.
Prices in Delhi fell by Rs2 to Rs229 per 50 kg bag, while in Rajasthan it fell by Rs2-4 per 50 kg bag.
Prices remained stable in Hyderabad and Bangalore.
However, the cities of Mumbai, Chennai and Kolkata witnessed a hike in cement prices during May.
Prices in Mumbai jumped by Rs19 from Rs234 per 50 kg bag in May 2007 to Rs253 per 50 kg bag in May 2008.
The price decline in the north has been attributed to the government’s measures to reduce cement prices.
The government had in April banned cement export to check rising prices, but later in May it removed the ban allowing export only from Gujarat port.
According to CMIE, the fall in prices was in response to increased supplies in the region.
Nearly 15 million fresh capacity came onstream in the northern region and accounted for a substantial 68% of the total incremental capacity, CMIE said.