Cement manufacturers have once again hiked the prices of the commodity two days ago. The cement manufacturers have hiked the prices by Rs 10-15 per bag and the hike has been effected in almost all the regions of the country. This is the second hike by the manufacturers in a span of 10 days.
On 6th of January cement manufacturers had hiked the prices expecting a better demand in the last quarter. Cement prices had gone up by Rs.20 per bag in East, South and West region and Rs.10 per bag in North and Central region. Notably, price hikes had been implemented in the non-trade segment as well. According to manufacturers, this hike has been absorbed by the market which has encouraged the manufacturers to go for the second hike.
After these two successive hikes in a short span of time, cement prices now gone up by 7% pan India on year on year basis.
Cement manufacturers expect a better demand in the last quarter, especially in the Western and Northern region. With the threat of air pollution receding construction activity in the North is expected to pick up. Also, it is expected that several incomplete infrastructure projects may be taken up at a faster pace to overcome the problem of unemployment and slowdown in the economy. All these factors have encouraged the manufacturers to increase price in rapid succession.
Sand still remains the biggest issue hampering the growth of construction sector and in turn affecting demand for cement. However, in many states they are in the process of getting resolved. For example, in Bihar the state government has initiated process for e-auctioning of sand mines in 14 districts. The mines will be allotted for a period of five years. In Madhya Pradesh, the state government has decided to allot sand mines for three years as against the earlier lease period of one year. Mines allotted this year would be renewed in 2022. The contractor would pay increased royalty of 10% per year and continue to operate the mines for three years. In Andhra Pradesh, the National Green Tribunal has ordered AP Pollution Control Board to conduct a detailed study on illegal sand mining and submit its report within a month. The next hearing is scheduled for 14th February.