Sluggish demand outlook to ease cement prices

Cement prices, which have moved up in the last quarter, may soften in the coming months due to a fall in offtake as an upshot of the onset of monsoons, when construction activities slow down and the spike in housing loan rates that is round the corner.However, the ballooning costs of raw materials, which are estimated at around 70-75 per cent of the cost of cement production, will continue to squeeze the cement manufacturers' margins. In the quarter of January to March 2011, a sharp increase in coal prices and railway freight charges nudged cement prices up by 8-12 per cent from the levels in December last year.