Cement industry witnesses surge of Rs 45-50 per bag in April

With rising input costs, fluctuating imported coal prices and crude, and expectations of improving demand, the cement industry witnessed a price hike in April by Rs 45-50 per bag, which was a 12% month-on-month (MoM) hike.

It is among the steepest hike in cement prices since January. In north India, the price hike was over Rs 50 per bag, 14% MoM.

Southern Indian markets witnessed about an 8-10% hike in April, at about Rs 30 per bag. Prices are around Rs 392 -400 per bag, up from the March price of Rs 362–370 per bag.

In the western part, cement prices rose by Rs 45-50 per bag, around 12% MoM, to Rs 423 per bag.

In central India, the hike was about 11% MoM, up by around Rs 40 per bag to Rs 421 per bag in April.

The eastern market witnessed a price hike of 13-14% MoM, at Rs 384 per bag.

According to IDBI Capital, the price hike resulted in weaker demand, but demand might rebound in the coming months. The cement demand might increase to 10-12% in FY23.

The increased input cost has led to an increase in the production cost by at least Rs 60-70 per bag.

The average imported coal price has remained volatile, as it has again increased above $300 per tonne.

According to analysts, the impact of the rise in coal and petcoke prices will have a lag effect, and it will reflect in the coming quarters.

ACC Cement, which declared results for the January-March quarter, witnessed the input cost pressure take a toll on its earnings before interest, taxes, depreciation, and amortization (EBITDA) margin. The margin shrunk over 600 basis points year-on-year (YoY). Its EBITDA margin was at 14.3%, lower than 20%. However, its blended EBITDA was down by 24% YoY.

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Also read: Cement prices shows an uptick in March as demand grows