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Cement Demand Strong As Prices Remain Stable
Cement

Cement Demand Strong As Prices Remain Stable

Channel checks show cement demand remained healthy with volume growth estimated at six to seven per cent in July and August 2026. Trade prices were broadly stable while non-trade prices were volatile in the East, and attempted hikes were rolled back amid higher competition. Average fuel costs rose in August by five to nine per cent, lifting spot petcoke and coal prices.

All-India trade price remained flat month on month in August as increased rake supplies and competition offset early increases. Monsoon related demand softness limited sustained hikes and dealers indicated further attempts would depend on demand trends. Combined July and August volumes were estimated at six to seven per cent, supported by infrastructure spending while retail housing remained weather sensitive.

In the South, a Rs20 a bag hike in August did not hold and prices stayed flat month on month, while dealers planned Rs25 to Rs30 a bag from fifth September 2026 but with uncertain sustainability. In the East, trade prices were unchanged and non-trade prices corrected by Rs15 to Rs20 a bag amid weak construction in West Bengal, Jharkhand and Odisha.

The West remained most resilient on pricing and demand despite attempted hikes of Rs10 to Rs15 a bag, and Gujarat saw relatively better volumes in August. North and Central markets kept prices range bound as players focused on ramping up utilisation of new capacity, with schemes of up to Rs2 to Rs3 a bag used to meet month-end targets. Overall construction activity improved as the monsoon eased, aiding a pickup in several states.

Fuel cost pressures persisted, with South African coal at USD114 a t and petcoke around USD146 to USD147 a t in August, while spot imported petcoke and coal were higher. Imported coal consumption cost stood at Rs2.07 per Kcal and petcoke at USD2.11 per Kcal. Analysts estimate the all-India trade spread to decline by Rs90 to Rs100 a t quarter on quarter, weighing on near-term profitability and they prefer UltraTech Cement (UTCEM), JK Cement (JKCE) and Grasim Industries (GRASIM).

Channel checks show cement demand remained healthy with volume growth estimated at six to seven per cent in July and August 2026. Trade prices were broadly stable while non-trade prices were volatile in the East, and attempted hikes were rolled back amid higher competition. Average fuel costs rose in August by five to nine per cent, lifting spot petcoke and coal prices. All-India trade price remained flat month on month in August as increased rake supplies and competition offset early increases. Monsoon related demand softness limited sustained hikes and dealers indicated further attempts would depend on demand trends. Combined July and August volumes were estimated at six to seven per cent, supported by infrastructure spending while retail housing remained weather sensitive. In the South, a Rs20 a bag hike in August did not hold and prices stayed flat month on month, while dealers planned Rs25 to Rs30 a bag from fifth September 2026 but with uncertain sustainability. In the East, trade prices were unchanged and non-trade prices corrected by Rs15 to Rs20 a bag amid weak construction in West Bengal, Jharkhand and Odisha. The West remained most resilient on pricing and demand despite attempted hikes of Rs10 to Rs15 a bag, and Gujarat saw relatively better volumes in August. North and Central markets kept prices range bound as players focused on ramping up utilisation of new capacity, with schemes of up to Rs2 to Rs3 a bag used to meet month-end targets. Overall construction activity improved as the monsoon eased, aiding a pickup in several states. Fuel cost pressures persisted, with South African coal at USD114 a t and petcoke around USD146 to USD147 a t in August, while spot imported petcoke and coal were higher. Imported coal consumption cost stood at Rs2.07 per Kcal and petcoke at USD2.11 per Kcal. Analysts estimate the all-India trade spread to decline by Rs90 to Rs100 a t quarter on quarter, weighing on near-term profitability and they prefer UltraTech Cement (UTCEM), JK Cement (JKCE) and Grasim Industries (GRASIM).

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