BQ Survey: Cement Prices Fall For A Third Straight Month; Will The Trend Continue?

All-India average cement prices fell by Rs 12 month-on-month to Rs 340 for a 50-kilogram bag in August, according to the survey of 15 dealers across five regions.

The price cut was the sharpest in south India. Dealers in the region have been informed about a potential price hike from September.

North

Cement dealers in the northern region cut prices by Rs 10—in multiple small amounts—to Rs 345 a bag in August, according to three dealers. They expect a further cut of Rs 15-20 a bag due to sluggish demand in the region.

East

Prices were lowered by Rs 10 to Rs 320 a bag due to continued shortage of labour, three dealers told BloombergQuint.

South

South India saw the steepest price cut across all regions. Cement prices were cut by Rs 30 to Rs 305 a bag following a slowdown in demand due to floods in Kerala, four dealers surveyed by BloombergQuint said. Poor demand due to stalled government projects also weighed on prices in the earlier part of the month.

After five consecutive months of price cuts, dealers in the region have been told about a potential price hike of Rs 50-80 a bag by Ambuja Cement Ltd. and Ultratech Cement Ltd. as cement makers plan to cushion falling product prices for profit sustainability. The transition to price hikes, however, remains patchy until construction activity picks up.

West

Cement dealers in west India slashed prices by Rs 8 to Rs 329 a bag due to sluggish construction activity, according to three dealers surveyed by BloombergQuint. Dealers in the regions have been told about a possible price hike of Rs 5-10 a bag in Mumbai as well as a few areas of Gujarat effective Sept. 1.

The region saw a price cut for the third straight month.

Central

To push volumes amid lacklustre demand, cement prices in central India were cut by Rs 6 a bag, according to two dealers. Prices have shown some resilience in the absence of substantial capacity addition, according to a dealer in Agra.