Cement manufacturers hike prices again this month

Cement manufacturers are sighing in relief as prices of the commodity continue to surge.

Last week, the western region, including Mumbai, saw a hike of Rs5-7 per 50 kg bag. Post this hike, the second this month, retail cement prices have gone up to Rs270 per bag for Grade A cement players and Rs260-265 per bag for lower grade manufacturers.
Increase in the cost of raw materials such as coal and freight is cited as the reason for the increase in prices.

“The manufacturers now want to maintain a minimum margin and that’s the reason they have increased prices. The price of imported coal in the last quarter was around $116, whereas now it’s at $125-130 per tonne. Even though there has not been any big ticket project announcement, demand is coming from the year-ending budgetary allocations,” said Rupesh Sankhe, an analyst with Angel Broking.

In the last quarter, ACC maintained a margin of 16%, Grasim at 20% and Ambuja Cements 19%.

In the northern region, prices are at a high and cement manufacturers such as Shree Cement and JK Lakshmi Cement are set to record better numbers in the fourth quarter as they are saving money on lesser lead distance.

Prices in Jaipur and Ahmedabad are at the highest in three years, at Rs250-255 per 50 kg bag for retail and Rs235-240 per bag for wholesale buyers.

In the southern belt, traditionally, 70% of the consumption demand comes from Andhra Pradesh, which is witnessing de-growth.
“In Hyderabad, there has been a price hike of Rs5 per bag last week. Prices have increased to Rs250-255 per bag in the region,” said an analyst from an international brokerage.