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Feature
Cement makers to hike prices
Cement manufacturers are set to hike prices by around `20
per 50 kg bag from October 1 in Gujarat, while a similar hike
is being contemplated for Maharashtra, including the key
market of Mumbai, to cash in on the spurt in demand following
the monsoons, dealers and analysts said. Cement prices had
cracked to around `150 in August from its peak of `225 in mid-
May, owing to sluggish construction activity in the monsoons
and scarcity of sand. With the proposed hike, prices of the
commodity will be around `180 per 50 kg bag in Ahmedabad.
In Mumbai, the hike is being considered and may be
implemented in a different way by withdrawing a discount of
at least `10 per bag that is being offered to dealers. The southern
region, which witnessed two rounds of price hike in September,
despite low demand and overcapacity, is also set to witness
another round of price increase.
In Hyderabad, prices may be hiked by `30 per bag, pushing
cement prices to around `240, while in Chennai prices may
be hiked by as much as `40 per bag. However, dealers in the
central and northern regions have not been intimated about
any hike in these regions as yet. However, cement companies
may announce some hikes in these regions depending on the
response to the hikes in southern and western India.
The export of cement during the month stood
at 0.15 mt compared with 0.13 mt in August 2009,
while that of clinker stood at 0.20 mt compared with
0.19 mt in last year.
The export of cement and clinker between April
and August this year stood at 1.73 mt compared
with 1.63 mt exported during the corresponding
period of the previous year.
Capacity addition
There was no capacity addition by large plants in
the cement sector for the third consecutive month in
August. There was no capacity addition in June as
well as in July.
The total capacity, excluding ACC and Ambuja
Cement, was at 215.78 mt as on August 31, 2010.
The total capacity was at 260 mt pan India if the
capacities of ACC and Ambuja Cement were to be
included. The recent depressed conditions in the
Indian market could be the reason behind the zero
capacity addition during the past three months.
“All expansion plans by big companies are
almost on track despite current depressed trend in
the industry and slight overcapacity, as it is quite
clear that India’s cement demand will continue to
rise,” an official of a cement company said.
COAL INSIGHTS 35 October 2010