Cement prices rose for the fifth straight month in May even as price corrections in the drought-affected south India kept overall gains in check.
All-India cement prices jumped 3 percent to Rs 372 per 50 kg bag on a monthly basis after the price hikes in north and west, according to a BloombergQuint survey of 17 dealers across five regions.
“Prices are expected to correct going forward, especially in the southern region with the onset of monsoon,” Cement Expert Sanjay Ladiwala said, adding that cement prices are now at their peak and have already started facing pressure due to slowing construction activity.
North Undertakes Price Hike
North India-based cement makers raised prices by 7 percent month-on-month to Rs 365 per 50 kg bag in May due to shortage of supply.
“New players in the region in order to survive cost pressure have been hiking prices which has given window of opportunity to old large players like Shree Cement to undertake a price hike,” Shree Cement Ltd.'s Managing Director HM Bangur said.
Bangur, however, cautioned about cement producers' limited ability to hike prices after the onset of monsoon.
The re-election of the current government and its thrust on infrastructure sector will augur well for the industry in the long run, he said.
Fourth Consecutive Hike In West
Cement makers in west India hiked prices for the fourth straight month in May.
Bina Engineer, whole time director at Sanghi Industries Ltd., expects little room for further price hikes due to slowing construction activity in Gujarat and Mumbai.
East And Central India Participate In The Rally
Prices in the eastern region jumped by Rs 10 to Rs 360 per bag in May, aided by a strong demand in Odisha and West Bengal. Central India, too, saw a similar quantum of hike with average cement price settling at Rs 385 per bag.
South Bucks The Trend
South India-based cement makers slashed prices by Rs 5 to Rs 370 per bag in May due to lack of demand from the region. This was the second-straight price cut as water issues weighed on pricing power.
The price correction, however, came after two big price hikes in February and March.
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