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BQ Survey | Cement Prices Fall For Second Straight Month

Cement prices fell for the second straight month in a seasonally weak period and because of a liquidity crisis. 



A tool sits in a bucket of cement at a construction site. (Photographer: Chris Ratcliffe/Bloomberg)
A tool sits in a bucket of cement at a construction site. (Photographer: Chris Ratcliffe/Bloomberg)

A slowdown in demand in a seasonally weak monsoon period and a liquidity crunch in the real estate sector pulled down cement prices for the second straight month, according a BloombergQuint survey.

All-India average cement prices fell by Rs 10 month-on-month to Rs 352 for every 50-kilogram bag in July, according to the survey of 14 dealers across five regions. Except central India where prices remained unchanged, all other regions saw cement getting cheaper. While the price cuts were sharp in the southern and eastern regions, they were relatively lower in north and west India.

South Takes A Hit For Fourth Straight Month

A slowdown in government projects and a ban on illegal sand mining in Andhra Pradesh weighed on cement prices in south, according to four dealers. Prices in the region were lowered by Rs 25 to Rs 335 a bag.

Cities such as Thiruvananthapuram, Bangalore, Hyderabad and Kozhikode witnessed price correction due to lack of construction activity during monsoon.

North Sees A Small Cut

Price cut in the northern region was similar to the one seen in the previous month. According to three dealers, prices are expected to go down further as most companies kept rates stable despite lacklustre demand.

Steep Cut In The East

Dealers in the eastern region cut prices the most in the second straight reduction. Demand contracted because of flooding in Bihar, according to three dealers surveyed in the region.

Cement Gets Cheaper In West Too

Slow real estate demand, funding issues and seasonally slack period weighed on demand the western region where prices fells Rs 8 a bag, according to two dealers surveyed by BloombergQuint.

Central Region Holds Up

Central region showed resilience for the month under review, managing to retain prices with the demand holding up in Madhya Pradesh. According to an Anand Rathi report, the region may retain pricing power due to lack of capacity additions.