Cement supply doubles after export ban

 H M Bangur, president, Cement Manufacturers' Association (CMA) and managing director of Shree Cement, said, "Gujarat cannot absorb any more cement, whereas Rajasthan is also a cement surplus state. This has caused an oversupply to Mumbai which could sharply erode the profitability of Gujarat-based cement manufacturers." 
 

PRICE SPIRAL Indicative cement prices in Mumbai
Month	Wholesale prices per 50 kg bag
Dec-05	Rs 165
Jan-06	Rs 170
Feb-06	Rs 175
Feb-06	Rs 185
Mar-06	Rs 195
Apr-Aug 2006	Rs 215
Sep-06	Rs 222
Nov 2006-Feb 2007	Rs 230
Mar-07	Rs 240
Mar-Dec 2007	Rs 240-245
Mar-08	Rs 248
Apr-08	Rs 255
Source: Cement Stockist and Dealers's Association of Bombay

 Saurashtra Cement, Gujarat Siddhi Cement, UltraTech, Ambuja Cements, Binani Cement and Sanghi Industries are the among the major players having operations in Gujarat.

 With demand declining due to the approaching monsoon and increasing supply, the city is experiencing a glut, said dealers. According to market players, in an uncertain situation with continuous pressure from the government to slash the rates "nobody wants to store stocks".  Vinod Juneja, managing director, Binani Cement, said, "During the rains, cement demand is dull. We expect slight cut in prices during this period."  Market sources said that builders in the city, in anticipation of a sharp reduction in cement prices, are postponing their purchases.  The country exported 3.65 million tonnes of cement and 2.37 million tonnes of clinker in financial year 2008.  Gujarat saw a cut of Rs 5-7 for a 50 kg bag of cement early this month and Rajasthan, along with the central part of the country, witnessed a cut of Rs 3-4 a bag.  Cement dealers, however, said that despite the government saying that prices are cut, there has so far been no intimation from companies regarding a cut in prices in Mumbai.  Rajasthan, Gujarat and Maharashtra together consumed more than a quarter (42.55 million tonnes) of the total domestic cement consumption (164 million tonnes) in 2007-08.  However, in the north, the demand for cement seems to continue its firmness. Pradeep Jain, chairman, Parsvanath Developers, said, "I do not know about the western region but in the northern part of the country, the demand for cement is more than the supply. Construction activities are in full swing."  Currently, the cement prices in Mumbai are ruling at Rs 255 a bag in the wholesale market, whereas on the retail front, they have reached up Rs 270-275 a bag. ACC, UltraTech, Ambuja, Binani, JK Lakshmi, Vasvadatta and Jaishree Cement are the different cement brands sold in Mumbai.  Cement prices in Mumbai have always been in the focus as prices are the highest here among the other metros in the country.  The city alone consumes 0.65 million tonnes of cement a month, which is more than the monthly consumption of states like Uttarakhand, Punjab, Himachal Pradesh, Delhi, Bihar, Jharkhand, Orissa and Chhattisgarh.