Cement sector to witness recovery in demand, prices: ICRA

Cement prices are expected to improve with recovery in demand going forward as demand growth in FY15 remains relatively more favourable on given the new government's focus on revival of infrastructure and investment spending, says a report of credit rating agency ICRA.
The wholesale cement prices in North and West came under pressure in Q2 FY15 due to monsoons. Post monsoons, the recovery in prices has been slow.
Cement companies had raised prices by Rs 5-20/bag in October 2014 but prices again came under pressure in November and December due to slow recovery in demand.
For example, average wholesale cement prices in Delhi declined from Rs 290/bag in July, 2014 to Rs 268/bag in Sept, 2014. Post monsoons, prices increased to Rs 288/bag in October but again declined to Rs 260/bag in November and Rs 253/bag in December 2014, the report said.

Cement prices in North India saw some recovery in January this year.
In South, prices remained largely stable post the hikes undertaken in June 2014 and were hovering in the range of Rs 300-310/bag in Hyderabad market till Oct 2014. While there was a minor correction in the month of Nov 2014, cement prices again increased to Rs 321/bag in December, 2014, it said.
The price hike has been sustained in the month of January. Cement prices in Eastern markets have largely remained stable in this financial year.
While average cement price in Q3'FY15 slid below last year's prices in North and West, the average prices in FY'15 (YTD) across most markets are higher than those in the corresponding period last year.