Cement prices may recover post-monsoon: CMIE

Cement prices are expected to recover after the monsoon ends due to a likely pick-up in construction activity, the Centre for Monitoring Indian Economy has said.

"We expect cement prices to recover after the rains. With construction activity expected to pick up post-monsoon, demand is likely to rise," the Centre for Monitoring Indian Economy (CMIE) said in its monthly review here.

Cement prices have declined amid sluggish demand from May onward. Prices in the Mumbai, Delhi and Kolkata markets are down from their peak levels of March-April, 2011, it said.

Prices in the Mumbai market were down to Rs 276 per 50 kg bag in July 2011, from Rs 283 per 50 kg bag in April. In the Delhi market, cement prices declined to Rs 256 per 50 kg bag from the peak level of Rs 261 per 50 kg bag in April.

In a similar fashion, prices in the Kolkata market came down to Rs 247 per 50 kg bag during the month from the peak level of Rs 298 per 50 kg in March.

However, prices in the southern region bucked the downward trend and remained stable. Prices in the Chennai and Hyderabad market remained almost stable at their peak of April, 2011, in the month of July, 2011.

Meanwhile, cement dispatches grew by 10.1% in July, 2011.

All-India cement dispatches (including ACC and Ambuja) reported strong year-on-year growth of 10.1% in July, 2011. Cement demand improved y-o-y in all regions except for the southern region in July, 2011.

The industry reported double-digit volume growth for the first time in six months in July, 2011, primarily due to the lower base (in July, 2010, cement dispatches had declined by 3.9% due to heavy rains) and a modest improvement in cement demand.