Cement manufacturers surprised the market by hiking price of the commodity in the first week of April and the quantum of hike (average all India level price increase was 7.5%), considering the market condition, too was surprisingly steep. Many people in the market were suspect about the ability of the market to hold onto steep hike in the prices. However, their expectations of price corrections were belied and April month was ended at almost peak level, with the exception of few markets.
However, price hike was not even within the region and varied from market to market. For example, in Central region, MP saw a price hike of 10% while in eastern UP it was just 2.5%. In Eastern region, Kolkata and Odisha saw a steeper price increase of 14%, while Patna and Ranchi saw cement prices going up by 10%. During the month, price hike was rolled back by 4% in Raipur.
Southern consumers are one of the highest payers for a bag of cement. In the Southern region, cement price in general ruled between Rs 390-400 per bag. Price hike was rolled back by Rs 10-15 per bag in Tamil Nadu, while Hyderabad and Vizag saw a price hike of 5.4% and 5.6% respectively, during the month.
After a decline of 3% in the prices in the month of March, Ahmedabad, Surat and Vadodara witnessed a price hike of 14% in April. Price hike in Mumbai and Pune was milder at 7.4% during April.
In Northern region, price hike was steeper in Rajasthan at 12.5% while it was less than 10% in NCR market. Price hike was just 4-5% in Chandigarh and Ludhiana.
Steep hike in the price during April had its impact on the demand too which was moderated during the later parts of April. There was acute shortage of labour due to increased participation in election campaigning and also slowdown in construction activities. Demand from real estate sector was also depressed thanks to liquidity crunch being faced by the sector in the aftermath of NBFC crisis.