Cement prices shows an uptick in March as demand grows

Cement prices increased in March when compared to the previous month. After remaining relatively stable in the three months leading up to February, prices in March surpassed the November high.

This could help cement companies offset the impact of higher input costs while also benefiting from increased demand.

On a month-over-month basis, the pan India average cement price rose by over 10% to Rs 395 per 50 kg bag as of March 22, 2022, according to various brokerage reports based on dealer interactions. Based on a year-over-year comparison, it increased by 11%.

Given the slow pace of project awarding and execution, as well as issues related to sand availability, the average price had peaked at Rs 385 per 50 kg in November over the previous 12 months, leaving cement makers little room to raise prices.

Prices began to firm up again in March, according to sector trackers, as the sector enters a seasonally strong period for construction activities.

Furthermore, the government's speed in awarding road projects has accelerated. The rising cost of raw materials is expected to be alleviated by the buoyancy in cement prices.

In the last three months, prices of key raw materials such as imported coal and petcoke have risen by as much as 50%.

Analysts predict that cement consumption in the March quarter will be higher than in the previous quarter.

Given the likelihood of increased demand, the full benefit of higher cement prices is expected to be reflected in cement companies' financial performance beginning in the second quarter of 2022.

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