HomeNewsCement price falls in December as manufacturers go for volume push

Cement price falls in December as manufacturers go for volume push

December being the last month of the year when meeting the volume targets overwhelm other factors one cannot expect huge price increase for cement. No wonder then all India average price of the commodity took a beating during December and fell by about 5%. Also, non-trade segment continued to outpace trade segment demand due to increased infrastructure activities.

Due to extra push given by the industry, volumes are likely to rise a low-single-digit on YoY basis and  35% on MoM basis to 33 mn tonne in December, which is likely to result in pan India utilisation of 78%. On MoM basis, all regions are likely to see sharp 30-50% MoM volume growth due to low base led by South and East regions. On YoY basis, South achieved highest volume growth and may register low-double-digit volume growth (again on low base) while East may still see marginal fall in volume. On the other hand, all other regions may see low-single-digit growth.

Price dip was not uniform and varied from region to region. Average prices fell sharply in East and South by 7% MoM and exit prices in these regions are below September 2021 levels. Other regions also saw 3-4% MoM fall. However, average prices in December are still up 6-7% YoY in North / Central regions, up 11% YoY in West, up 3% YoY in East and almost flat YoY in South.

However, historically, December has been an important month for the industry as the demand during the moth sets the momentum for the peak construction period of January-June. Considering the price action during December, manufacturers may wait at least till mid-January for any further price hike. Also, they have another worry to deal with, i.e., possible Covid third wave.

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