OfBusiness Cement Dailies

2nd May’23

Price

• Due to a sharp increase in prices by up to Rs 25/bag, demand continues to remain weak in the Cement industry.
• The prices of Ex-Kotputli Aggregates for 10mm and 20mm remain constant at Rs 350/ton and Rs 450/ton, respectively.

Demand and Supply

• Currently, there are no supply issues, but Cement companies are feeling the heat of the weak demand as new orders have suddenly stopped and rains all over India have worsened the situation. Maintaining the price hike would not be easy.

News

• Cement demand remains weak and is broadly similar across various regions of India. This is the first time in many years that the January to March quarter has witnessed little price hikes.
• The head of the Cement Association says, “It has been an unusual quarter for Cement stocks”. This quarter witnessed new capacities, which put a lid on Cement prices. Nearly 100 million tons of capacity additions are expected in the next two to three years. Most companies have decent profitability with underleveraged balance sheets. It will be essential for Cement demand to continue being high to maintain the existing level of profitability.

OFB’s Opinion

• Prices are still an issue for the market as we fear the rates will not be stable, and they may fall as demand pressure increases on Cement companies. Companies may look to break the barrel of the price if demand does not come through this week.
• The demand for aggregates is slow due to rains in many regions in India, leading to no construction activity.