Cement prices to remain strong in second half of FY2021

The COVID-19 pandemic has changed the trend in cement pricing this year. Cement prices have been rising sharply surprising analysts. Contrary to historical trends of lower cement prices quarter-on-quarter in the third quarter of the calendar year due to softness in demand during the Diwali season and the lower exit prices in Q2 on account of the monsoon. In the third quarter of FY2021, average cement price is up 0.8 per cent QoQ so far across India, as against a decline of 1.1 per cent - 0.7 per cent QoQ seen in the past 5-10 years. And even as variable costs rise, cement spreads (price minus power, fuel and freight costs) are expected to remain strong in H2 FY2021.