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Nirmal Bang: Cement Demand And Pricing Slide Further In September

Nirmal Bang: Cement Demand And Pricing Slide Further In September

A cement mixer stands at an abandoned construction site. (Photographer: Prashanth Vishwanathan/Bloomberg)
A cement mixer stands at an abandoned construction site. (Photographer: Prashanth Vishwanathan/Bloomberg)

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Nirmal Bang Report

Based on our channel checks, cement demand and prices remained weak during September 2020 owing to seasonality, excessive monsoon, labour shortages in various regions and overall low spending by the public and private sector.

All-India cement prices have declined by approximately 3% over the last one month, primarily driven by East and North regions where the pricing decline was the highest at 7% and 3%, respectively.

Pricing decline was lower in Central India at approximately 1% despite reduction in demand. The fall in trade prices was higher compared to non-trade prices as the latter were already depressed.

Cement demand in September has historically been higher compared to August.

However, initial estimates indicate that cement demand during the first fortnight of September 2020 was down 10-12% on month on month basis.

We believe that diminishing impact of pent-up demand is getting evident and hence the East region, which had done exceedingly well during the lockdown, is showing some weakness.

Demand weakness in central and eastern regions could be due to labour returning back to work in cities.

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Nirmal Bang Cement Sector Channel Check -17 September 2020.pdf

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