Cement offtake dropped 25% in April-June: ICRA
Cement

Cement offtake dropped 25% in April-June: ICRA

The second wave of Covid 19 adversely affected the domestic cement sale in the April-June quarter, decreasing 25% on a quarter on the quarter (QoQ) basis but pent-up demand is anticipated to drive the volumes commencing the July-September quarter, as per an ICRA report.

On Monday, rating agency ICRA told the media that in April 2021, when the second wave was on the rise, the domestic production had dropped 35% month on month in April 2021 and was 4% lower in comparison to the pre-pandemic April 2019.

This time the rural areas have also been affected in the second wave, unlike last year when it was limited to mainly the urban areas.The recovery in the rural areas is anticipated to be gradual, said ICRA.

But, it also added that the overall pent-up demand is expected to push the offtake once lockdowns are relaxed.

According to Anupama Reddy, ICRA AVP and Sector Head, the cement firms have initiated price hikes by an average of 5% year over year in April 2021.

This hike is driven by the rise in the input expenses, primarily fuel and power costs and freight costs over the past few months.

Additionally, she said that while the cement prices are expected to considerably sustain in the near term, the higher input costs, because of the rising crude oil costs and under absorption of overheads are likely to lead to a moderation of EBITDA per mt to about Rs 1,200 per mt in Q1 FY22, lower by 20% year over year and 6 to 7 % quarter over quarter.

In FY21, which ended on March 31, sales have already been adversely affected leading to the sharpest de-growth over the last ten years. Domestic cement production dropped by 12% to 294 million mt.

A striking impact on production was observed in Q1 FY21 with a production decrease of 38.3 % year over year owing to the adverse effect of the lockdown imposed in the country with the construction workers coming to a pause, mainly in April 2020, it said.

While in the January-March quarter of FY21 cement firms observed a boost in sales volumes by 23% year over year to 73 mt.

Image Source


Also read: Cement prices in May stay firm despite Covid-19 disruptions

Also read: Cement demand may surpass 340 mt in FY22: ICRA

The second wave of Covid 19 adversely affected the domestic cement sale in the April-June quarter, decreasing 25% on a quarter on the quarter (QoQ) basis but pent-up demand is anticipated to drive the volumes commencing the July-September quarter, as per an ICRA report. On Monday, rating agency ICRA told the media that in April 2021, when the second wave was on the rise, the domestic production had dropped 35% month on month in April 2021 and was 4% lower in comparison to the pre-pandemic April 2019. This time the rural areas have also been affected in the second wave, unlike last year when it was limited to mainly the urban areas.The recovery in the rural areas is anticipated to be gradual, said ICRA. But, it also added that the overall pent-up demand is expected to push the offtake once lockdowns are relaxed. According to Anupama Reddy, ICRA AVP and Sector Head, the cement firms have initiated price hikes by an average of 5% year over year in April 2021. This hike is driven by the rise in the input expenses, primarily fuel and power costs and freight costs over the past few months. Additionally, she said that while the cement prices are expected to considerably sustain in the near term, the higher input costs, because of the rising crude oil costs and under absorption of overheads are likely to lead to a moderation of EBITDA per mt to about Rs 1,200 per mt in Q1 FY22, lower by 20% year over year and 6 to 7 % quarter over quarter. In FY21, which ended on March 31, sales have already been adversely affected leading to the sharpest de-growth over the last ten years. Domestic cement production dropped by 12% to 294 million mt. A striking impact on production was observed in Q1 FY21 with a production decrease of 38.3 % year over year owing to the adverse effect of the lockdown imposed in the country with the construction workers coming to a pause, mainly in April 2020, it said. While in the January-March quarter of FY21 cement firms observed a boost in sales volumes by 23% year over year to 73 mt. Image Source Also read: Cement prices in May stay firm despite Covid-19 disruptions Also read: Cement demand may surpass 340 mt in FY22: ICRA

Next Story
Equipment

Handling concrete better

Efficiently handling the transportation and placement of concrete is essential to help maintain the quality of construction, meet project timelines by minimising downtimes, and reduce costs – by 5 to 15 per cent, according to Sandeep Jain, Director, Arkade Developers. CW explores what the efficient handling of concrete entails.Select wellFirst, a word on choosing the right equipment, such as a mixer with a capacity aligned to the volume required onsite, from Vaibhav Kulkarni, Concrete Expert. “An overly large mixer will increase the idle time (and cost), while one that ..

Next Story
Real Estate

Elevated floors!

Raised access flooring, also called false flooring, is a less common interiors feature than false ceilings, but it has as many uses – if not more.A raised floor is a modular panel installed above the structural floor. The space beneath the raised flooring is typically used to accommodate utilities such as electrical cables, plumbing and HVAC systems. And so, raised flooring is usually associated with buildings with heavy cabling and precise air distribution needs, such as data centres.That said, CW interacted with designers and architects and discovered that false flooring can come in handy ..

Next Story
Infrastructure Urban

The Variation Challenge

A variation or change in scope clause is defined in construction contracts to take care of situations arising from change in the defined scope of work. Such changes may arise due to factors such as additions or deletions in the scope of work, modifications in the type, grade or specifications of materials, alterations in specifications or drawings, and acts or omissions of other contractors. Further, ineffective planning, inadequate investigations or surveys and requests from the employer or those within the project’s area of influence can contribute to changes in the scope of work. Ext..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?