Cement demand to improve, US tariff impact seen for metal: Crisil

After two years of a pricing slump, the cement sector is expected to see price hikes in the next financial year, said rating agency Crisil in its India Outlook FY26 report. The agency noted pricing pressure in the commodity sector, with aluminium also impacted by US trade tariffs.

 

“For the cement sector, demand momentum is set to improve in FY26, with traction from infrastructure and rural housing segments, leading to 7 per cent Y-o-Y volume growth,” the rating agency said, adding that after a 1 per cent decline in price in FY24, and another 6 per cent in FY25, cement prices should grow 3 per cent Y-o-Y in FY26, supporting revenue growth.

 

On the commodity sector, Crisil said, “especially metals, will continue to drag down growth due to prevailing pricing pressure.”

 

The US's move to impose a flat 25 per cent tariff on aluminium imports from March 12, compared with a raft of lower levies currently in place, will have a negative impact on Indian manufacturers of the metal, it noted. Crisil said that half of India’s aluminium production is currently exported, of which 6 per cent goes to the US.

 

Further, Crisil expects scrap prices to rise. “After the 25 per cent tariff kicks in, end-users in the US would prefer using locally manufactured aluminium, which is predominantly produced by scrap recycling. This, too, will have a bearing on India, as 26 per cent of the aluminium scrap it imports is from the US. Consequently, we foresee some impact on domestic secondary aluminium and alloy producers,” the note said.