Chennai Cement Prices Surge Rs 15, Firms Cut Despatches

Cement prices in Chennai have gone up by almost Rs 15 after leading south-based manufacturers jacked up prices last Saturday.

According to cement dealers, companies have cut despatches by almost half to the market and instead have effected a price rise. In September, prices in the Chennai market were at a record low at about Rs 100 per bag.

Now prices are around Rs 165 for B grade cement, while the A grade cement prices are ruling at about Rs 5 more. Demand for cement in the market has been at an all-time low because of an acute shortage of sand and building activities have been affected.

The sand shortage has come about because of water logging in traditional areas from where sand was being excavated. With demand at a low, cement manufacturers have cut despatches and ensured a Rs 15 hike per bag making it one of steepest in recent times ensuring that price realisation per bag goes up.

According to a dealer, "Demand in the market has dried up because of the lack of availability of sand and companies have cut despatches by almost 50 per cent and, instead, effected a Rs 15 hike in the price per bag".

In a year which has witnessed a downtrend in production as well as sales in the southern states, input costs have also gone up. Cement prices dipped to a low in August and September but have steadily gone up over the last one month sparking fears that there is an informal cement cartel that is artificially increasing prices of cement to ensure profitability.