Cement prices have seen a fresh drop in several parts of the country, led by the southern region.
Chennai, which had seen price cuts two weeks ago after the Tamil Nadu chief minister’s intervention, has seen fresh cuts of Rs10-15 per 50 kg bag. The new prices are at Rs260-265 per bag for retail and Rs220-225 per bag for wholesale buyers.
“The demand is not too high and the ministry is too sceptical of an increase in prices. Also, rains are acting as a dampener in the region,” a Chennai-based dealer said.
In Mumbai, prices have dropped marginally by Rs3-4 per bag, thus for the region where Octroi is charged grade A cement has dropped to Rs256-258 for retail buyers and Rs246-248 for Grade B players. For buyers in the non-Octroi region like Bhayander and Mira Road, prices in both the grades are Rs7 lesser.
Even in the eastern region, prices have taken a knock, with Kolkata seeing a reduction of Rs10 per bag in the last 4-6 days. The drop was led by Ambuja Cements and followed by all the major A grade players such as Lafarge, ACC, UltraTech. Currently, prices are down at Rs264-265 for wholesale buyers and Rs270 for retail.
Andhra Pradesh, on the other hand, has seen a choppy trend. Prices have fallen by as much as Rs10 per bag in some parts of the state even as Hyderabad city has seen an uptick of Rs5 per bag, with retail prices going up to Rs 248 per bag for grade A and Rs 240-243 for grade B.
In the wholesale segment, grade A is commanding Rs243 per bag and Grade B Rs 235-237 per bag.
“The companies are saying that the wholesalers should sell at the invoice receipt that the manufacturers are selling at and not less than that. But the truth is that the demand is not high and the inventory with the dealers and stockists is also not high,” said a Hyderabad-based dealer.
Rupesh sankhe, research analyst from Angel Broking, said, “AP is flat and in fact declining by Rs5-10 per 50 kg bag with retail pricing at Rs 220 per bag and wholesale for Rs210.”
A major reason for the fresh drop in prices is oversupply in the southern market, while the western region is faced with a surge in incremental supply, which some feel could cause prices to drop further.
However, a senior member of the Cement Stockists and Dealers Association in Mumbai said, “Cement prices have fallen just yesterday. Even though there is incremental supply which is coming in from South, first further price correction in southern markets will take place and then it will happen in Mumbai.”
“The companies have indicated that prices can fall further and we should be ready for it, though they did not indicate the timeline. At present, the demand is very low from both the construction and housing segments.”
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