+
Crisil predicts 1-3% drop in cement prices despite strong demand
Cement

Crisil predicts 1-3% drop in cement prices despite strong demand

Cement prices will experience a decline of 1-3% during this fiscal year. This comes after a period of significant growth, with a compound annual growth rate (CAGR) of 4% over the past four years, leading to a new all-time high of Rs 391 per 50 kg bag in the previous fiscal year.

The increase in prices was primarily due to disruptions caused by the Covid-19 pandemic, followed by a sharp rise in input costs, particularly for thermal coal. The situation was further exacerbated by the Russia-Ukraine war. However, the current trend is expected to reverse due to intensified competition and a decrease in input costs.

Since the beginning of 2023, there has been a moderation in prices, attributed to the gradual decline in energy costs and the efforts of manufacturers to gain market share during the seasonally strong fourth quarter. Sequentially, prices fell by an average of 1% to Rs 388 per bag in the fourth quarter of the previous fiscal year, despite manufacturers holding high-cost inventory. However, prices remained elevated compared to the previous year.

The increased competitive intensity is evident from the fact that, for the first time in several years, there were no price hikes before the monsoon season in April and May of this fiscal year, despite steady demand. The top five players in the market accounted for a volume share of 55% in the last fiscal year, compared to 49% before the Covid-19 pandemic, indicating their efforts to improve their market share.

Hetal Gandhi, the director of Research at Crisil Market Intelligence and Analytics, stated, "The company anticipates strong year-on-year cement demand growth of 8-10% this fiscal year, which is a pre-election year. However, this growth is not expected to drive prices up. On the contrary, prices are projected to decline by 2% year-on-year to Rs 382-385 per bag, primarily due to relatively moderate growth in the trade segment."

The situation regarding input costs also favors lower prices. Australian coal prices experienced a decline of 10% and 36% quarter-on-quarter in the third and fourth quarters of fiscal year 2023, respectively, after reaching multi-year highs in August and September 2022.

Also read:
UltraTech tops 2023 sustainability rankings as no. 1 cement
Long-lasting effects of refractory bricks


Cement prices will experience a decline of 1-3% during this fiscal year. This comes after a period of significant growth, with a compound annual growth rate (CAGR) of 4% over the past four years, leading to a new all-time high of Rs 391 per 50 kg bag in the previous fiscal year. The increase in prices was primarily due to disruptions caused by the Covid-19 pandemic, followed by a sharp rise in input costs, particularly for thermal coal. The situation was further exacerbated by the Russia-Ukraine war. However, the current trend is expected to reverse due to intensified competition and a decrease in input costs. Since the beginning of 2023, there has been a moderation in prices, attributed to the gradual decline in energy costs and the efforts of manufacturers to gain market share during the seasonally strong fourth quarter. Sequentially, prices fell by an average of 1% to Rs 388 per bag in the fourth quarter of the previous fiscal year, despite manufacturers holding high-cost inventory. However, prices remained elevated compared to the previous year. The increased competitive intensity is evident from the fact that, for the first time in several years, there were no price hikes before the monsoon season in April and May of this fiscal year, despite steady demand. The top five players in the market accounted for a volume share of 55% in the last fiscal year, compared to 49% before the Covid-19 pandemic, indicating their efforts to improve their market share. Hetal Gandhi, the director of Research at Crisil Market Intelligence and Analytics, stated, The company anticipates strong year-on-year cement demand growth of 8-10% this fiscal year, which is a pre-election year. However, this growth is not expected to drive prices up. On the contrary, prices are projected to decline by 2% year-on-year to Rs 382-385 per bag, primarily due to relatively moderate growth in the trade segment. The situation regarding input costs also favors lower prices. Australian coal prices experienced a decline of 10% and 36% quarter-on-quarter in the third and fourth quarters of fiscal year 2023, respectively, after reaching multi-year highs in August and September 2022. Also read: UltraTech tops 2023 sustainability rankings as no. 1 cement Long-lasting effects of refractory bricks

Related Stories

Gold Stories

Next Story
Equipment

Radialisation is becoming increasingly important: Amit Tolani, CEAT

In a conversation with Ashlin Rajan, Amit Tolani, CEO, CEAT Specialty, discusses CEAT’s expanding off-highway tyre portfolio through Camso, the shift towards radialisation and the growing demands on construction equipment. He also shares insights into the company’s investments in automation, digitalisation, AI and sustainable manufacturing, as well as its plans to build more efficient and connected production capabilities. With Camso giving CEAT access to premium construction, agriculture, material-handling tyre and track segments, where do you see the biggest growth opportunity over ..

Next Story
Real Estate

MICL, Godrej Properties partner for Marine Lines project

Man Infraconstruction (MICL) has partnered with Godrej Properties Group for the development of a sea-facing residential project at Marine Lines in South Mumbai. The project has an estimated overall revenue potential of more than Rs 60 billion.Under the transaction, MICL, which was earlier the Development Manager for the project, has partnered with Godrej Properties for its development. The development rights jointly held by MICL and Shreepati Group have been transferred to Godrej Properties. MICL will continue to participate in the project through an agreed revenue-sharing arrangement.Spread a..

Next Story
Resources

Bharat Bijlee appoints Khushru Vakharia as MTM Vice President

Bharat Bijlee has appointed Khushru Vakharia as Vice President of its Magnet Technology Machines (MTM) Division, effective August 31, 2026. He succeeds R Rajaraman, who has retired as Division Head.The MTM Division is part of Bharat Bijlee’s Industrial Systems business and provides permanent magnet technology solutions, including the GreenStar range of gearless elevator machines for customers in India and international markets.Vakharia has more than 35 years of experience with Bharat Bijlee across manufacturing, strategic planning, operational procurement, plant engineering, quality assuranc..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code