Cement prices witness sharp decline

Cement prices witness sharp decline

All-India cement prices corrected by Rs 7/bag of 50 kg to Rs 361 in June, reversing the hike effected in May, showed the dealers channel check by Kotak Institutional Equities Ltd. Price cuts in June were mainly led by companies operating in South and West with Rs 8-11/bag month-on-month correction, the brokerage said in its June 18, 2019 report.

Poor demand combined with seasonality factor is likely to keep prices under pressure going ahead, say analysts.

Industry volumes increased by one per cent year-on-year (yoy) to 28.7 million tons (MT) in April 2019 after registering 12 per cent yoy growth in 4QFY19 and 13 per cent yoy growth in FY2019 (2018-19), according to the data released by the Department of Industrial Promotion and Policy (DIPP). The strong growth in FY2019 was led by the government's housing schemes and infrastructure demand.

However, with some input costs easing cement manufacturers are heaving a sigh of relief. As per the survey, prices of imported petroleum coke (pet-coke) remains in $95-100/tonne range. Domestic pet coke price at Rs 7,600/tonne is down 13 per cent quarter-on-quarter (QoQ) in the June quarter of the current fiscal. Thanks to flat diesel prices and with benefits of higher axle load norms kicking in, operating costs of cement manufacturers are expected to be stable in June Quarter.

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