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Despite lower demand, cement prices remain stable

Strangely enough, cement prices remained relatively stable through out April as compared to the previous month. The market showed its resilience despite the Covid second wave playing havoc with human lives all over the country. Construction activity was also affected to an extent as the migrant workers had started moving back to their native villages fearing pandemic spread, lockdown and consequent loss of jobs. Amidst these uncertainties, cement demand is showing some signs weakness. As per rail freight data, cement volume growth momentum has moderated in April with first fortnight of the month reporting 14% MoM decline owing mainly to seasonality in demand.  Also, resurgence of Covid-19 had its role to play in affecting the demand as well as sentiment.

Among all regions, only North Region showed some weakness in prices during April. Prices in Delhi declined by 1.4% MoM in April 2021 while in Jaipur prices witnessed a decline of 4.1% MoM. In Ludhiana also prices were down by 2.6% MoM. However, in rest of the markets flattish trend prevailed.

Cement manufacturers are entering the month of May with a sword uncertainty in the form of second wave of Corona hanging over their head. With more and more states joining the list of declaring local lockdowns its unlikely that demand would see dramatic upward movement. On the positive side, this year none of the states have declared complete lockdown as was the case last year and this has helped to keep the construction activities ticking though on a lower scale. However, with half of the busy season gone by, cement manufacturers’ aim of making good for the last year’s loss of business may remain unfulfilled.

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