HomeNewsCement demand declines in November

Cement demand declines in November

Cement demand was muted during November and the expected demand pick up post festivals didn’t happen this year resulting in double digit decline in demand for the commodity. However, strong institutional demand due to increased infrastructure activities saved the day for the cement manufacturers in November. However, analysts predict a demand decline of 4-7% during the third quarter due to various reasons.

Retail demand was muted due to multiple reasons which were mostly influenced by local factors. Festivals in the first half of November, limited availability of labor due to crop-cutting season in rural pockets, marriage season, the sudden rise in cement prices & higher prices of other construction materials like steel and regional issues like sustained lower sand availability in Bihar, ban on construction activities in Delhi, change in sand policy in Punjab & heavy rains in parts of South India resulted in restricted recovery in demand.

As per the available information, whole of NCR is affected by air pollution which has forced construction activities to grinding halt. This may further weaken the cement manufacturers attempt to hike the prices once again in December. Also, some manufacturers may go for volume push to meet quarterly targets. So, there may not be price hikes on all-India basis but cement manufacturers may go for hikes in certain pockets.  However, analysis of cement demand for 2005-20 show that demand in December has been higher by around 12% as compared to November. But, detection of new Covid variant may play a spoilsport. Also, unseasonal rains is another reason for worry for the cement manufacturers.

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