Vagaries of Cement Prices
Contrast that with the situation today:
CW Research, in their news bulletin, said that global cement prices continued their slide in Q1, 2019. Even if we recognise that the trend of "global" cement prices do not hold much meaning, it is a bad omen nevertheless! The bad news nearer home in India, was summed up by LiveMint: "As feared,...cement price...hikes, which started in April, have failed to sustain. In June, all-India cement prices corrected by...Rs 7/bag to...Rs 361, reversing the hike taken in May". As if to rub some salt into the wound thus created, the old bogey of cartelisation has made a reappearance, adding to the discomfort of the industry. It appears that the Competition Commission of India (CCI) is examining complaints regarding hike in cement prices and cartelisation by companies. "Complaints have been received regarding hike in cement price and cartelisation by cement companies," Commerce and Industry Minister Piyush Goyal said recently in a written reply to the Rajya Sabha....
And what happened to the upbeat growth forecasts for the year 2019/20? If morning shows the day, if April and May are any indicators for the year, then let it be said that the prognosis is not good. The core sectors' growth numbers have reported a paltry 2.3 per cent and 2.7 per cent growth in cement consumption in April and May 2019, respectively - quite a far cry from the double digits predicted! Normally, pre-election and pre-monsoon months are good for cement industry, but those traditional demand patterns have been disrupted this time. In fact, both ICRA and Care Ratings have drastically downgraded growth expectations of the sector to 5-7 per cent in the current fiscal, which is quite a comedown from the euphoria that prevailed earlier.
Such are the uncertainties of the market, and such are the vagaries of cement prices.