Cement prices may go up by Rs 9 per 50 kg this month

New Delhi: The price of a 50-kg bag of cement may go up by as much as Rs 9 this month as the new coal pricing mechanism adopted by Coal India has increased the production cost for makers of the building material, Crisil Research said on Monday.

“Cement players will try to pass on the cost increase resulting from the new pricing policy adopted by Coal India w.e.f. 1 January 2012. Hence, we believe that pan-India cement price is likely to rise by 2-3% in January, 2012,” said Crisil Research Head Ajay D’Souza.

Deviating from its earlier practice, CIL started pricing coal on the basis of gross calorific value - the energy produced by burning it - with effect from January this year. Earlier, the price of coal was fixed on the basis of the moisture and ash content present in coal.

The average price of a 50-kg bag of cement fell by 1% in December vis-a-vis November to Rs 285, despite strong 13.4% growth in demand vis-a-vis the corresponding month last year to 20 million tonnes.