Rise in cement prices in Sep to offset energy cost hike: Experts
NEW DELHI : The improvement in cement prices seen during September remains positive for the manufacturers amidst rising energy costs. The cement channel checks by brokerages indicate that improvement in cement prices continued in September led by major price hikes in East India. For September 2023 average prices are up 4% month-on-month and for second quarter (Q2FY24) are up 0.5-1.0% sequentially as per analysts at Jefferies India Private Ltd.
East India has seen maximum price hikes and the effective price increase in the east from end-August to end-September is ₹50-55 per bag. The rest of the regions also have seen price hikes up to ₹20 per bag with the exception of South India, as per analysts. The price hikes that took place in July- September quarter remain positive and will lift the sentiments for the sector, said Rajesh Ravi, Research Analysts at HDFC Securities.
The expectations of any price improvement remained low in the monsoon impacted quarter that sees slowdown in construction activities. The industry has performed better than its historical trend, said analysts. In the past three years, the industry witnessed an average fall of ₹14 a bag through July-September versus the Q1 average price, said analysts at Elara Securities India Pvt Ltd.
Analysts feel that the demand has remained strong boosted by government spending in the pre-election year and also as monsoon was erratic. Further the producers resorted to pricing discipline on the back of rising energy costs. International petcoke/coal prices have moved up further in September with overall increase of 30-40% from the July 2023 bottom, said Jefferies analysts.
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