Cement prices set to increase as expenses surge for cement makers
Cement

Cement prices set to increase as expenses surge for cement makers

Cement prices are set to increase as costlier Asian thermal coal, and a higher gas price outlook in Europe is expected to surge expenses for cement manufacturers.

Power and fuel prices are likely to rise by 10% in the April-June quarter because of a steep rise in coal and pet coke costs in March, UltraTech Cement Ltd told the media.

UltraTech Cement Ltd told the media that price hikes would be passed on to consumers for profitability to enhance sequentially.

In April, the pan-India cement maker indicated a price hike of Rs 30 a bag to make up for higher commodity prices.

Cement makers tried a Rs 15 to Rs 20 a bag hike pan-India, led by sharper growths in the south and the east for April, as per the dealer checks by Kotak Institutional Equities.

Only a portion of this would get absorbed, and more such increases could be attempted in the coming weeks.

The prices rose 6% year-on-year on an all-India basis for the quarter ended March.

For the quarter ended March, cost inflation, muted volume growth, and inadequate price hikes led to margin contraction. UltraTech said flat volumes and its power and fuel prices were higher than pan-India peers ACC Ltd and Ambuja Cements Ltd. However, its operating profit per tonne dropped the least.

Mainly, the outperformance was driven by operating leverage benefits and more increased realisation—or what it makes on every tonne of cement—in the east.

The margin of UltraTech is likely to contract given its inventory policy and also the recent sharp increase in global energy costs has yet to reflect in the power and fuel price of the company. Higher costs of pet coke and coal are reflected in the financials of the cement producers after a lag of 30-45 days. Margins contracted for ACC and Ambuja as their prices increased.

As per the Motilal Oswal report, ACC estimates a 7% demand increase in 2022 compared with 11-13% seen by the industry in the last year.

Ambuja Cements said that demand is expected to be driven by rejuvenation in real estate, promising 2022 crop outlook, India's infrastructure push, and execution of production-linked incentives to encourage domestic demand.

Image Source


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

Cement prices are set to increase as costlier Asian thermal coal, and a higher gas price outlook in Europe is expected to surge expenses for cement manufacturers. Power and fuel prices are likely to rise by 10% in the April-June quarter because of a steep rise in coal and pet coke costs in March, UltraTech Cement Ltd told the media. UltraTech Cement Ltd told the media that price hikes would be passed on to consumers for profitability to enhance sequentially. In April, the pan-India cement maker indicated a price hike of Rs 30 a bag to make up for higher commodity prices. Cement makers tried a Rs 15 to Rs 20 a bag hike pan-India, led by sharper growths in the south and the east for April, as per the dealer checks by Kotak Institutional Equities. Only a portion of this would get absorbed, and more such increases could be attempted in the coming weeks. The prices rose 6% year-on-year on an all-India basis for the quarter ended March. For the quarter ended March, cost inflation, muted volume growth, and inadequate price hikes led to margin contraction. UltraTech said flat volumes and its power and fuel prices were higher than pan-India peers ACC Ltd and Ambuja Cements Ltd. However, its operating profit per tonne dropped the least. Mainly, the outperformance was driven by operating leverage benefits and more increased realisation—or what it makes on every tonne of cement—in the east. The margin of UltraTech is likely to contract given its inventory policy and also the recent sharp increase in global energy costs has yet to reflect in the power and fuel price of the company. Higher costs of pet coke and coal are reflected in the financials of the cement producers after a lag of 30-45 days. Margins contracted for ACC and Ambuja as their prices increased. As per the Motilal Oswal report, ACC estimates a 7% demand increase in 2022 compared with 11-13% seen by the industry in the last year. Ambuja Cements said that demand is expected to be driven by rejuvenation in real estate, promising 2022 crop outlook, India's infrastructure push, and execution of production-linked incentives to encourage domestic demand. Image SourceAlso read: Cement industry witnesses surge of Rs 45-50 per bag in April

Next Story
Equipment

SANY Named Top Chinese Construction Machinery Firm in Forbes 2000

SANY Heavy Industry (600031.SS) has been recognized as China's premier construction machinery manufacturer in Forbes' 2025 Global 2000 list, ranking 956th position worldwide. The prestigious list evaluates companies based on four key metrics: sales, profits, assets, and market value, with data calculated from the latest 12-month financial results as of April 25, 2025. This achievement underscores SANY's leadership credentials in the global heavy machinery industry, validating its forward-looking "Globalization, Digitalization, and Decarbonization" strategy and reinforcing confidence in its inn..

Next Story
Infrastructure Urban

Vedanta Aluminium Marks Pride Month with Boost in LGBTQI+ Hiring

Vedanta Aluminium, India’s largest aluminium producer, is redefining inclusivity in manufacturing by actively recruiting and empowering transgender individuals across its operations. As part of the Pride Month celebrations, the company has announced that it will hire 15 transgender employees in 2026, increasing the total strength to 44 across its operations in Jharsuguda, Odisha and Korba, Chhattisgarh. Vedanta Aluminium has introduced a comprehensive framework of progressive policies to support the assimilation and well-being of transgender employees. These include sensitization workshops ..

Next Story
Infrastructure Urban

Reactor Containment Successfully Tested at Rooppur NPP Unit 1

At power unit No.1 of the Rooppur NPP, which is being built in the People's Republic of Bangladesh by the Rosatom State Corporation Engineering Division, tightness and strength tests have been successfully conducted at the containment of the reactor compartment. The tests confirmed full compliance with the design requirements and the highest safety standards of the reactor containment.During the tests, a compressor was used to increase the pressure inside the containment to the design value of 4.6 kgf/cm² (which corresponds to approximately 0.45 MPa) and a series of tests were conducted to co..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?