Mumbai: Cement manufacturers have started slashing prices in the Delhi NCR region this week as demand slips and pressure from builders grows. These companies have been facing allegations of price fixing from builders who had taken the matter to the Competition Commission of India (CCI).
About four cement companies in the Delhi NCR region have cut prices by about 17-19% following allegations of artificial price hikes and a cartel-like behaviour, said Manoj Gaur, president, Confederation of Real Estate Developers Associations of India (Credai)-NCR.
The companies have started taking orders at a price of ₹ 245-250 per bag from this week, lower by about ₹ 50, said Gaur. He did not disclose the names of the companies which have cut prices.
Two dealers from the NCR region, who did not want to be named, said there has been a price cut in the range of ₹ 5-15 per bag in the last two to three weeks as demand continues to remain weak. Dealer prices differ from bulk prices at which cement makers supply to builders.
“Cement manufacturers had to cut prices as they were not sustainable. We expect further correction due to weak demand. With the festive season, labour shortage may lead to lower construction activity," said one of the two dealers mentioned above.
According to these dealers, the price of a cement bag in Delhi is ₹ 285 compared to ₹ 300 per bag two to three weeks back.
Last month, builders in and around Delhi said they would stop buying cement from UltraTech Cement Ltd and Lafarge India Pvt. Ltd, which they alleged had pushed up prices artificially.
Despite low demand, cement prices in recent months have risen 20-40% in major Indian cities, according to Credai.
The real estate lobby, which has 220 members, had sent a petition to the CCI on 5 October against the price hikes.
The NCR is India’s largest real estate market, consuming about 12-15 million tonnes of cement a year. Companies including JK Lakshmi Cement Ltd, Shree Cement Ltd, UltraTech and Lafarge are among the cement manufacturers with a major presence in the north Indian market.
An email query sent on Thursday evening to JK Lakshmi, UltraTech and Lafarge remained unanswered. Concerned officials at Shree Cement could not be reached for comments.