With Monsoon on a withdrawal mode and festive season all set to start, cement manufacturers have hiked the prices partly to offset increase in cost of production. However, according to dealers, in the East, price hike may come after the Durga festivals as West Bengal goes on a holiday mode during this period.
South region with a hike of Rs 40 per bag sees the highest price increase followed by North where price is increased by Rs 15 per bag. Meanwhile price hike in West and Central region is modest at Rs 10 per bag. In the East too dealers expect Rs 10 per bag price increase after Durga Festivals.
In the South, Bengaluru and Chennai have seen the highest price hike, though some dealers are sceptical about the sustainability of the price hike hinting that at least a partial roll back cannot be ruled out in the coming days.
October price increase comes on the heels of continued weakness in cement price during July-September period which is normally considered a lean period for the construction sector due to Monsoon rains. Apart from the Monsoon, higher COVID-19 cases in some states, such as Kerala, lower availability of sand, increased farming activities and the inauspicious Pitru Paksha were region-specific issues resulting in soft demand.
Apart from good festive demand, cement manufacturers are affected by sustained increase in the cost due to elevated price level of fuel and pet coke will also force them for a price hike. However, sustainability of the price at higher level will largely depend upon early withdrawal of Monsoon, revival of construction activities and containment of the pandemic.