Cement companies in no mood to reduce prices

Cement makers are unwilling to apply brakes on the continuous rise in prices, despite the finance minister’s claim of giving relief to the industry.

A day after the Union Budget was presented, prices in the Mumbai market, the largest domestic one, were raised by Rs 10 for a 50-kg bag. Industry analysts and dealers of cement said other regions would soon follow suit, especially northern and eastern markets.

The average all-India price of a bag has surpassed Rs 265, the highest since the industry entered its downturn. Interestingly, two months ago, the prices were Rs 220-225 a bag. In Mumbai alone, prices have touched Rs 280 a bag. A Mumbai-based dealer told Business Standard all cement makers were targeting Rs 300 a bag as the peak season has already set in.

“I do not foresee cement prices will soften till June,” said the chief executive of a cement company. According to the Cement Manufacturers’ Association, the restructuring of duties would add an extra burden of Rs 3-4 a bag.
 

HEAVY PRICE

* All-India cement prices surpass Rs 265 a bag

* Cement makers say no respite in prices till June

* Mumbai takes the lead, companies target Rs 300 a bag soon

* Northern players likely to follow suit

* Companies following discipline supply strategy, cut down production

* Installed capacity close to 300 million tonnes per annum

Share prices of cement majors, which had slipped on the Budget day, regained some of this today on the Bombay Stock Exchange. The shares of ACC were up 1.2 per cent while Ambuja’s stocks gained the most at 3.2 per cent. UltraTech regained its previous day’s losses to close at Rs 957.2 a share, up three per cent, whereas shares of India Cements closed 2.7 per cent up at Rs 88.2.