Low demand forces cement firms to go for price cuts
Cement prices may decline by Rs 10-15 per 50 kg bag across India in December, expects Cement Manufacturers Association of India. Though monsoon season was over, demand for cement in the country has not yet revived from sectors such as infrastructure and real estate, the Association said as one of the reasons for its prediction.
In the western region, cement companies decided on a price cut of around Rs 10 per 50 kg bag from December 1. In other regions also price cuts are expected soon, the Association told a business newspaper. After the price cut, a 50 kg bag of cement costs around Rs 290 on an average across the country.
Vinita Singhania, Managing Director of JK Lakshmi Cement, told that the demand for cement is not picking up as expected.
Until large infrastructure projects picks up and a revival in real estate demand is witnessed, demand for cement is likely to remain under pressure.
Further, during the winter season, labourers tend to go back to their native places, which also impacts construction activities in the north.A study by tariff commission says that 64 per cent of demand for cement is driven by housing, 6 per cent by industrial, commercial and, institutional demand accounts for 13 per cent and infrastructure 17 per cent.