Cement prices rise to cover losses: ICICIdirect
According to dealers, cement prices are expected to remain firm in the coming days, which is important to cover the costs as volumes are not supporting and falling continuously due to monsoon arrival in the country, says ICICIdirect.com.
July 01, 2013 / 12:56 IST
ICICIdirect.com's report on cement sector update: June 2013
All-India cement prices saw an uptrend led by price hikes across all regions in the country. The southern region saw an average price hike of Rs 30/bag, the highest among all regions, which took the all-India average June 2013 prices to Rs 308/bag as compared to Rs 294/bag in May 2013. In the east and west region, prices increased by Rs 15-20/bag, which took average prices in the east and west region to Rs 333/bag and Rs 306/bag, respectively, for June 2013. In the northern and central region, prices increased in the range of Rs 5-10/bag, taking the northern & central price average to Rs 296/bag and Rs 293/bag, respectively. Demand fell drastically across regions mainly due to early arrival of monsoons and a general slowdown in the infrastructure sector. With this upward pricing trend, all-India average cement prices stood at Rs 308/bag, a rise of ~Rs 14/bag MoM. On a YoY basis, prices are up by Rs 15/bag. According to dealers, cement prices are expected to remain firm in the coming days, which is important to cover the costs as volumes are not supporting and falling continuously due to monsoon arrival in the country.Industry outlook: All-India cement dispatch growth for FY13 remained tepid due to sluggish consumption from the housing and infrastructure segments on account of key issues like rising cost of capital, land acquisition & clearances and unavailability of key raw materials like coal for the manufacturing industry. Also, government led demand push growth remained lower in FY13. Although we expect H1FY14 to remain tepid in terms of demand, we continue to remain neutral with a positive bias on the industry as we believe the demand supply scenario will improve on the back of a pick-up in infra spending by the government (with higher allocation towards expenditure vs. last year) and revival in private sector spending on likely softening of the interest rate cycle.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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