Recent Cement Price Hikes Cheers North Cement Industry
Cement prices have risen by Rs 80 per bag of 50 kg in the past two months and may rise further in North Cement Markets. Recently, cement companies have hiked prices yet again by Rs 20 per bag of 50 kg in North India and may raise it further as demand is picking up and as logistics costs rise according to cement industry sources.
Retail cement prices have increased by a total Rs 80 per bag in under two months and is now being retailed at Rs 315-320 in the Delhi-NCR area. Cement dealers say that they expect cement prices to rise by Rs 10-15 by the end of this month itself.
Although companies have cut down on the cement supplies, retail cement prices are being driven up by rising demand and logistic costs. In the Delhi-NCR area, as companies are switching to railways, dealers have to pick up deliveries from the godowns, which results in additional cost of Rs 10 per bag.
Despite the skewed demand-supply scenario, cement companies in India have been constantly adding capacity over the past decade via the brown-field route, as setting up of new cement capacity via the greenfield route becomes challenging and costly.
As of late, cement sales performance region-wise differ vastly and there is a race to gain larger scale market dominance and access to better performing regional cement markets. The southern and eastern cement markets seem to perform better than their counterparts elsewhere.
The cement industry is hoping for better days to come as the government has announced a series of steps to accelerate infrastructure development especially cement-based roads.
Apart from stepping up building, Prime Minister Narendra Modi has put on the fast lane the ambitious Bharat Mala project to build 5,000 km of border and coastal roads for an estimated Rs 55,000 crore. In June, the National Highways and Infrastructure Development Corporation of India (NHIDCI) had invited bids for project reports on 2,100 km stretch of roads.
Transport Minister Nitin Gadkari said recently that construction of highways has gone up to 13 km per day in the last one year compared with just 3 km per day during the previous years. The target is to step it up further to 30 km per day within two years.