HomeNewsSouthern cement manufacturers optimistic about demand revival

Southern cement manufacturers optimistic about demand revival

Though cement manufacturers are optimistic about cement demand in the coming months, they are slightly hesitant to initiate price hikes, especially in Southern markets. Cement companies had announced Rs 25-30/bag price hike in Andhra Pradesh and Telangana towards the end of October, but its impact was nullified by offering higher discounts to the dealers. Karnataka is seeing some price hikes in the beginning of the month. Its generally believed that as demand improves, billing rates might not increase but the price difference or discounts would shrink.

UltraTech is the leader in Karnataka market, followed by ACC, Dalmia and Ramco; In Tamil Nadu markets, Ramco and Chettinad are the leaders followed by UltraTech, India Cement and Dalmia. However, Tamil Nadu may not see much price hike as the rainy season has just commenced there. Tamil Nadu is facing another problem in the form of lower flyash supply which is due to lower power generation which in turn is due to lower power demand. Shortage of flyash could impact PPC production and cause flyash procurement to get dearer.

Interestingly, negligible supply has been happening under the government’s Amma Cement Scheme over the past year owing to low procurement rate of Rs205/bag as against market rates of over Rs300/bag. Renegotiations are underway for increasing the prices and if the prices are hiked supply under the scheme could resume thereby providing an opportunity of 2-5 lakh tonnes demand per month.

On the other hand, Bangalore real estate demand has been buoyant with 20% YTD growth and demand from this sector may keep the prices steady. In Tamil Nadu too, land registrations have gone up by more than 20% yoy which could create demand in the future.

Subscribe to our newsletter

To be updated with all the latest news from Sawdust

reports

moves

tenders

latest news