Home News Continued lockdown may impact cement demand in May

Continued lockdown may impact cement demand in May

Demand for cement may remain sluggish in May as many major cement consuming states including Rajasthan, Maharashtra, Karnataka, Chhattisgarh have extended the work restrictions and strict implementation lockdown rules. This is likely to keep in check most of the economic activities though infrastructure and construction continue to be exempted from the curbs imposed.

In other words, first half of this financial year may be a repetition of last year with slight improvement (due to lower base effect). Also, there is no complete closure of either production or supply of the material as the construction activities are continued though on a lower scale. Also, many migrant workers preferred to continue working at the site than go back to their native villages (as had happened last year) which has ensured sufficient labour supply at the sites.

However, present lockdown will impact the demand, at least in the first half and its difficult whether the loss of business in the first half could be made good in the second half. Also, it may put pressure on the pricing of the commodity though till now the manufacturers have shown discipline which has helped the industry in maintaining the prices.

In April, whatever price increase was announced had to be rolled back as the demand was not on expected lines. This may at least ensure that there may not be further price hike attempts by the cement manufacturers in the near future.

According to some rough estimates, volume was impacted by around 20% in the month of April and May also see similar reductions. Both lockdown and elections in some states had impacted the demand  for the commodity last month.

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