BQ Survey: Cement Prices Rise To Five-Month High In January

Cement prices rose in January after falling for seven straight months as construction activity resumed across all regions in India with the onset of the new year.All-India average cement prices for a 50-kg bag increased by Rs 17 month-on-month in January to Rs 340—the highest in five months—according to 14 dealers surveyed by BloombergQuint. This was also the biggest price hike since April 2019.The price hike was the highest in South India, followed by the northern and western regions, the survey showed. Cement producers raised prices by Rs 10 per 50-kg bag in the eastern and central regions..South Undertakes The Biggest HikeCement makers in the southern region raised prices by Rs 30 per 50-kg bag to Rs 315. Brokerages, however, had anticipated a bigger hike at the start of the month.The first round of the price hike to the extent of Rs 20 per bag was implemented, but the second round to the extent of Rs 30 per bag failed to sustain due to poor demand, according to three dealers from the region.Fiscal-end pressure to maintain volumes weighed on pricing power, the dealers said..Also Read: India Cements MD N Srinivasan Expects 2020 To Be Better For The Industry.Second Price Hike In NorthLifting of the ban on construction activity in Delhi NCR led to revival of demand in the region, dealers said, adding that a pick-up in rates ahead of elections also played out. Delhi goes to the polls on Feb. 8.Prices in North India rose by Rs 20 per 50-kg bag to Rs 358. The region has undertaken two price hikes of Rs 10 each so far this month.Dealers, however, expect prices to reverse in the absence of demand after the election..East Awaits Second HikeIn the eastern region, dealers hiked cement prices by Rs 10 per bag to Rs 312.The second round of hike, which was supposed to take place this week, wasn’t implemented due to poor demand, three dealers surveyed by BloombergQuint said, adding that labour shortage due to severe winters, tight liquidity conditions and lack of construction activity weighed on pricing power.Dealers, however, anticipated a price hike to the tune of Rs 5 per bag later this month even as they were uncertain if it would sustain..West: Prices Hiked TwiceCement makers in the western region undertook two price hikes as government-led construction activities gained traction, three dealers told BloombergQuint.The first price hike of Rs 10 per bag came into effect in the first week of the month and the second one was implemented on Jan. 20, the dealers said, pointing to a potential price hike of Rs 5 per bag by the month-end or at the start of February.Cement prices in the region rose by Rs 15 per bag to Rs 320..Muted Increase In Central IndiaCement prices in the central region rose by Rs 10 per bag to Rs 365. The region has been relatively insulated to the massive price fluctuation on account of limited capacity addition, the dealers said..OutlookWhile brokerages sounded optimistic about the price hike implemented in January, which usually kick-starts the period of construction activities after festive season, they remained cautious on sustenance of these prices.Also Read: Cement Makers Expect Return Of Pricing Power As Stocks RallyHolding on to these prices is the key, Spark Capital and Reliance Securities said in their monthly cement pricing notes.

BQ Survey: Cement Prices Rise To Five-Month High In January

Cement prices rose for the first time in eight months in January, increasing by as much as Rs 17 month-on-month to Rs 340 per bag.

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