Cement Prices Shoot Up Highest Increases In Southern Markets
Cement companies in India have hiked the prices in September after keeping the prices fairly stable during the month of August, according to a dealer check conducted by Equirus Securities. Cement companies usually increase prices during the first of every month, and often roll back the changes when they find that there is a dip in demand. Equirus said channel checks also suspect a partial rollback to flow in shortly. The highest increases have been carried out in the southern markets, where prices have been increased by a whopping Rs 35 per bag, followed by the eastern region, where it has been increased by Rs 20 per bag. The northern markets have witnessed a hike of Rs 15-20 per bag. The central and western regions of the country including Madhya Pradesh, Gujarat, Maharashtra etc.. experienced a comparatively lesser increase in the prices to the tune of Rs 10-15 per bag, according to the dealer checks. According to the report, the eastern and southern regions of the country have seen less demand while the trend has remained stable in the central regions. The north and western parts of the country continue to show a healthier demand through the month of September, it added. Cement companies have attempted to raise cement prices multiple times this year, with varying levels of success across different regions of the country.In North India, cement companies were largely able to implement price hikes of around Rs.10-20 per bag between January and March. Demand from infrastructure and housing projects in states like Rajasthan, Punjab, Haryana and Uttar Pradesh supported the price increases. However, rising input costs, especially coal prices, continued to put pressure on profit margins. From April onwards, slower construction activity during the hot summer months led to reduced cement demand. This prevented further significant price rises for the rest of the year in North India. The South Indian cement market presented a mixed picture during this period. In states like Tamil Nadu and Karnataka, improved construction activity and lower production costs allowed companies to raise prices gradually by Rs.10-15 per bag from January to April. But in Kerala and Telangana, weak demand conditions and intensifying competition from newer players restricted the room for price hikes. From May to August, heavy monsoon rains affected construction activity and cement dispatch volumes in South India. This forced companies to cut back prices to boost sales during the lean monsoon period. In East India, specifically in states like West Bengal, Bihar and Odisha, cement demand remained relatively weak throughout the first half of 2023. High competition among established and newer players in this region prevented any major cement price increases. Most companies in East India could only implement marginal hikes of around Rs.5-10 per bag from January to June. It was only from July onwards, with the start of the festive season, that demand started to gradually improve in East India. This enabled more meaningful price rises of Rs.15-20 per bag in July and August. The Western states of Gujarat and Maharashtra saw healthy demand from infrastructure and housing projects during the January-April period. Cement manufacturers were able to raise prices by Rs.15-25 per bag during this phase. However, the onset of monsoons from May led to slowed construction activity and flooding in some parts of Gujarat. Cement prices in western markets stabilized during the rainy season due to weaker demand conditions. In August, with the ebbing of monsoon rains, cement dispatches started to pick up again in West India. But higher input costs prevented manufacturers from considering any major price hikes for the rest of the year.
Tags : cement companies India hiked prices dealer conducted Equirus Securities southern markets central western regions country eastern demand North India Rajasthan Punjab Haryana Uttar Pradesh coal prices West Bengal Odisha Bihar Gujarat Maharashtra