HomeBrand UpdatesAAC Block makers worried as raw material price shoots up

AAC Block makers worried as raw material price shoots up

Autoclaved Aerated Concrete (AAC) Blocks industry is worried as the cost of its main raw materials, viz., lime, cement, petcoke and aluminium powder) has gone through the roof in recent months. The industry was already under pressure as the margins had become very thin due to intense competition in the industry in recent years.

Over the last decade, Lightweight Construction Blocks have emerged as a building material of choice and a suitable replacement for clay bricks due to their superiority over later, like high thermal insulation, optimal fire protection, and excellent acoustic & earthquake resistance properties. The industry has recently witnessed a revival in demand from the urban housing sector. However, a rise in volume accompanied by a moderate price hike in Lightweight Concrete Block prices is less likely to balance the impact of rising input costs for AAC firms.

Petcoke prices have increased by 70%. Lime and Aluminium prices have increased by 25% and 60% respectively. Overall inputs have increased by almost 35% and on the contrary AAC, manufacturers have been able to forward the impact of these prices only partially due to intense competition.

AAC Block prices are still below Rs. 4500 per cbm and brick prices meanwhile have gone beyond Rs 5500 per cbm in some areas. The cost of setting up new capacities has gone up by 70% over the last few years. According to some industry experts, for the industry to survive, pricing in the range of Rs 5000 – 5500 would lead to healthy margins for the industry.

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