Home News Cement price retreats and demand weakens in December

Cement price retreats and demand weakens in December

After strong recovery of demand with high single digit growth in October-November, cement demand cooled down in December due to variety of reasons. On an average cement price declined by 2-3% on an all-India basis to touch Rs 332-334/bag which is still higher than December 2019 prices.

In South, prices fell by 1.5% during the month due to poor demand. In Telangana real estate sector continued to remain dormant as only recently the new registrations were restarted following procedural changes which in turn affected the demand. As most of the material from Gulbarga region was diverted towards Maharashtra, supply remained restricted in Bangalore which helped to hold up the prices. In Chennai construction is expected to start post the festivity from mid-January but the state elections may keep the activities at low ebb till May. In Kerala discounts were offered by some manufacturers to meet the year targets which kept the prices low.

Gujarat, in Western region, saw steady demand aided by good demand from infrastructure and real estate sector. However, excess supply push by some cement manufacturers to meet the year end targets kept the prices in check. In Maharashtra infrastructure activities are not picking up due to liquidity crisis and real estate seeing demand for completed projects to take advantage of stamp duty reduction with not many new launches happening. Both these factors adversely affected the cement demand.

Farmers agitation in Punjab and Haryana in Northern region affected the movement of the material and also the construction activities. In Rajasthan infrastructure activity was affected temporarily due to funds crunch faced by many projects. In Delhi real estate activity was picking up which was not enough to offset the sluggish demand on infrastructure front. On the whole in North India construction activities affected due to severe cold weather.

In Indore and Bhopal, in Central region, demand was weak and also excess supply from other regions kept prices under pressure. In east UP demand was low and hence prices were under pressure while in west UP demand was steady but weather conditions were severely impacting any pick up in demand.

In Odisha, in eastern region, prices were under pressure due to supply from southern region and neighbouring Chhattisgarh cluster. Demand in Chhattisgarh was very weak in urban areas while it was steady in rural segment. The demand in Bihar is expected to pick up post stabilisation of the new government.

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