Cement prices are expected to rule firm in the coming months due to rise in input costs and manufacturing expenses, according to Centre for Monitoring Indian Economy ( CMIE).
During 3Q FY 2012, power and fuel cost rose by 10.7% year on year (Y-o-Y) due to twin effects of higher coal prices (both domestic and imports) and cheaper rupee against the dollar. Freight costs were also higher by 12.5% Y-o-Y due to increase in diesel costs and surcharge levied by Railways.
'(Cement) prices are likely to remain high in the coming months. The growth is expected to moderate as the base effect sets in. Prices are expected to recover and rise by 6.4% in FY 12, after falling in the previous year,' the city-based think-tank said in its monthly review.
The prices are expected to average 3.8% higher in FY13, it said.
The cement price in Mumbai, one of the largest markets, shot up by Rs42 per 50 kg bag, from Rs248 in January 2011 to Rs290 in January 2012. The average price of cement bag was Rs292 in January 2012, CMIE said.
Meanwhile, the demand of cement is expected to improve in the coming months and growth in despatches is likely to be modest at around 4% during March 2012 quarter, the research outfit maintained.
Leading cement producer ACC said its production for February 2012 stood at 2.14 million tones per annym (MTPA) as against 1.97MTPA in the corresponding period in 2011. The despatches increased from 2 MT in February 2011 to 2.15 MT last month.
Ambuja Cements' output shot up from 17.91 lakh tonnes in February 2011 to 19.93 lakh tonnes in February 2012. The despatches rose from 17.74 lakh tonnes to 20 lakh tonnes respectively.
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During 3Q FY 2012, power and fuel cost rose by 10.7% year on year (Y-o-Y) due to twin effects of higher coal prices (both domestic and imports) and cheaper rupee against the dollar. Freight costs were also higher by 12.5% Y-o-Y due to increase in diesel costs and surcharge levied by Railways.
'(Cement) prices are likely to remain high in the coming months. The growth is expected to moderate as the base effect sets in. Prices are expected to recover and rise by 6.4% in FY 12, after falling in the previous year,' the city-based think-tank said in its monthly review.
The prices are expected to average 3.8% higher in FY13, it said.
The cement price in Mumbai, one of the largest markets, shot up by Rs42 per 50 kg bag, from Rs248 in January 2011 to Rs290 in January 2012. The average price of cement bag was Rs292 in January 2012, CMIE said.
Meanwhile, the demand of cement is expected to improve in the coming months and growth in despatches is likely to be modest at around 4% during March 2012 quarter, the research outfit maintained.
Leading cement producer ACC said its production for February 2012 stood at 2.14 million tones per annym (MTPA) as against 1.97MTPA in the corresponding period in 2011. The despatches increased from 2 MT in February 2011 to 2.15 MT last month.
Ambuja Cements' output shot up from 17.91 lakh tonnes in February 2011 to 19.93 lakh tonnes in February 2012. The despatches rose from 17.74 lakh tonnes to 20 lakh tonnes respectively.
....more info