Regional trends in cement
November volumes are expected to be weak and the much expected post-Diwali demand recovery has not happened. Funds crunch, sand shortage and labour unavailability continue to weigh on cement demand.
South: Price hikes fail to sustain
Prices were hiked to record levels in all four southern states in the second week of September. However, prices have slipped below 2QFY14 averages in all regions. AP continues to remain under pressure with prices in the non-trade segment receding sharply back to 230-235 levels. In Bangalore too, the gap between trade and non-trade prices has widened; Rs 55 from Rs 30 in early November.
Demand remained weak in AP and TN. In TN, slowdown in government projects is the key driver, while AP remains subdued due to the ongoing political uncertainty. Given sliding prices despite production cuts, further declines are very likely, especially in AP and Karnataka.