Cement prices to firm up on construction boom

Cement prices are expected to maintain their northward movement in the backdrop of the continuing boom in the construction sector and rising cost pressures.

"Cement prices remained firm across major cities, backed by a strong demand from the construction sector. Given the strong demand and also that companies were facing rising cost pressures, cement prices are expected to continue their upswing post-monsoon," according to a Centre for Monitoring Indian Economy's (CMIE) capex survey.

Mumbai and Delhi witnessed a price hike of Rs 3-5 per 50 kg bag.

Prices in the Mumbai market peak to Rs 242 per 50 kg bag in July and stood at Rs 239 in September. The rates in September 2006 were at Rs 215 per 50 kg bag.

The uptrend in cement prices was more salient in south India, with Chennai and Hyderabad reporting a rise of around 6.5 per cent each. The hike was much sharper in Bangalore at around 19 per cent, CMIE said.

Cement consumption continued to rise even during the slack monsoon period. It posted a double digit growth of 14.5 per cent and 18.6 per cent in July and August, respectively.

Cumulative consumption also grew by a healthy 10.8 per cent during April-August 2007. During this period, the western zone recorded the fastest consumption growth of 20 per cent compared with other regions, it said.