With the onset of Monsoon which was heavy in some regions of the country, cement prices retracted from their June highs. In most parts of the country, cement prices have fallen by 1-4% during July depending upon the demand scenario. While Western, Southern and Northern regions saw cement prices falling Central and Eastern regions saw lesser fall than other regions as the impact of Monsoon was not felt in those regions and also demand for the material was relatively good.
On an all India basis retail price fell by Rs 8-10 per bag during July. While in North and South price fell by Rs 8/bag, in Western region fall was by as much as Rs 12/bag. On the other hand, price fall on Eastern and Central region was by Rs 4/bag and Rs 5/bag respectively. In fact, it is the first time in last four months cement price has seen a fall.
In Southern region Kerala saw steepest price fall of Rs 10-15/bag, thus nearly erasing 50% of the gains of June increase. In Western region both Maharashtra and Gujarat saw price corrections, but price fall was steeper in Gujarat vis-a-vis Maharashtra.
According to experts, cement price may continue to soften due to seasonality factors. However, recent IMD prediction of country receiving less than normal rainfall may restrict the fall to an extent and may result in commencement of construction season much earlier than one expected.
Further, increased push given to infrastructure development and faster sanctioning of houses under Prime Minister Awas Yojana just before the general elections may help the cement companies to sustain their volume growth in the coming months.