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Sector watch: Where are cement prices headed?
Cement prices are on the rise again, especially in regions in north India. In an interview with CNBC-TV18, Sanjay Ladiwala, President of Cement Stockists & Dealers Associcaiton and Yashwant Mishra, Senior Joint President & Marketing Head of Mangalam Cement gave their perspective on cement prices and the road ahead.
Q: How much is the gap between north India and south India, still if most northern India markets are going at about Rs 245 per bag, what is the going rate in south India?
Mishra: Today the rate is Rs 160 available at all the places in south India, so you can understand that the gap is very big. As Sanjay has said correctly that ocean cannot be filled with points.
But the thing is that cement is always region specific; you cannot have south India players to go in north India fully or north Indian players going in south India fully until and unless there is a big gap in prices.
So at present, the position is like that only, Rs 160 in south and Rs 240 in north, so everybody like to go, but they are not able to go. So that's why north India is picking up prices and south India is lagging behind.
Q: There has been some commissioning of new supplies also from the northern part of the country from large companies like JP. Is that being easily absorbed or do you think once this peak season gets over that may have some sobering influence on prices?
Mishra: I am of the view that in long-term cement industry will have very good market. If 50% of the government commitment comes in time or in next two-three years also, then the industry will be lagging of supply because in 2014 around when government demand will be at peak 2013-14, then supply will be constraint if the situation remains as we have considered.
