Cement prices, which had seen a sudden surge in the first week of April and then continued on the uptrend till June, have now started slipping.
Cement prices, which had seen a sudden surge in the first week of April and then continued on the uptrend till June, have now started slipping.
In Mumbai and Gujarat, cement prices have fallen by Rs 5-7 per 50 kg bag and the eastern region is likely to follow soon. Though cement companies in the south have not affected any fresh price cut, they are offering discounts of Rs 10-12 per bag on billing rates.
Cement players say prices in the north could continue to remain flat due to the government’s infrastructure spend.
In May, cement prices in Mumbai were at Rs 259 per 50 kg bag for wholesale buyers and Rs 270 for retail buyers.
Vinod Juneja, managing director, Binani Cement, which operates in northwest India, said, “We have cut prices by Rs 3 per bag, prices are falling in the western region due to the bad monsoon.”
“Demand from Tier II cities and rural sector has traditionally been a very good source of demand, but due to the failure of the monsoons, demand is going down. We expect prices to again go up after October.”
A cement stockist based out of Mumbai, who did not want to be named, said, “Prices have fallen for most of the brands like Grasim, Ambuja and ACC.”
When contacted Grasim, the spokesperson declined to comment citing they do not comment on prices.
Cement prices are down Rs 10-12 per 50 kg bag across south India since last three weeks. “There are some companies that have not changed their billing rates, but are offering discounts, as demand has turned sluggish,” said a large cement stockist in Chennai.
At present, cement prices in Chennai are at Rs 263 per 50 kg in the trade-wholesale segment, while retail prices are around Rs 270.
In Hyderabad, wholesale prices of are Rs 210-214 per 50 kg, and retail rates are Rs 220, dealers said.
“For B-grade to C-grade cement, prices are lower further at 185 rupees and 175 rupees per 50 kg, respectively, in Hyderabad, it’s a draught situation, construction activity is coming to halt as there is scarcity of water for construction,” a Hyderabad-based stockist said.
Requesting not be named, a senior member of Cement Stockists and Dealers Association of Bombay (CSDAB) said, “Prices in western region have not gone down recently by Rs 5-7 depending upon cement brands. The northern market is very strong because of Commonwealth Games and the metro projects and prices there are not likely to change much.” At present prices in northern region are hovering around Rs 255 for retail and Rs 250 for wholesale buyers.
Binani adds, “In the whole of north India, prices are expected to remain flat after the government announced an over Rs 1000-crore grant for the Asian Games, 2010 Commonwealth Games and metro projects. It is too early to predict whether demand will be hit badly due to drought situation.”
HM Bangur, president, Cement Manufacturers Association and managing director, Shree Cement, said, “Of the 200 million tonne cement capacity at present in India, there has been a 3 mt shrinkage in capacity usage owing to the lower monsoon. There is a Rs 2-5 per bag slippage in prices in most markets. In the eastern zone, material from the south has also started coming and so prices will be correcting very soon. Prices in northern market will not go up, price has to come down, it is matter of time when it will come down.”
Cement price in Kolkata has shot up to Rs 280 for retail buyers and Rs 275 for wholesale buyers for per 50 kg bag.
(With NW18)
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