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Business News/ Money / Sector Review: Cement
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Sector Review: Cement

Sector Review: Cement

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We recently concluded cement dealers survey across various Tier I and Tier II cities in the country.

Cement consumption growth was buoyant at 10.9% y-o-y between November’08-February’09 largely driven by government’s emphasis on completing infrastructure and housing related projects before the coming elections.

Even in March, dealers witnessed robust demand driven by projects under public-private partnership (PPP).

Most of the dealers surveyed were confident about healthy consumption growth till monsoon. However, they are anxious about demand post monsoon as new real-estate projects have taken a pause in the past 12-18 months.

Cement prices

Acceleration in infrastructure activity, supply constraints, cartelization and logistic issues led to a sharp jump in cement prices across Northern, Central and Eastern regions.

On the other hand, prices in Southern and Western regions were stable, as real estate and infrastructure activity have considerably slowed down.

All the dealers in Northern and Eastern regions expect prices to rise by Rs5-10 per bag in the near term. However, dealers in Central and Western regions were of the opinion that the prices may remain flat till monsoons.

To our surprise, dealers in Southern region are expecting prices to fall anywhere between 15-20% in the near-to-medium term as they feel bunching of new capacity will lead to supply glut in the region.

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Published: 02 Apr 2009, 10:45 AM IST
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