Cement prices are on a downward spiral with the onset of monsoon. Prices in the southern states have started to peel off, with Chennai witnessing a drop of Rs 10 per 50-kg bag from June 1 for the trade segment and a drop of Rs 15 per bag for the non-trade.
A member of the stockist association says, “The price at which we are selling to builders is at Rs 250-265 per bag. Trade prices have fallen from their peak of Rs 290-295 per bag to Rs 280-285 per bag. We are expecting further reduction beyond July, as sand supply has been bad for a month, which has put construction under pressure. In Andhra Pradesh, prices have fallen by Rs 20-25 to Rs 235-240 per bag from the earlier Rs 260-265.”
In the eastern part of the country, cement prices have fallen by Rs 5 per 50-kg bag. A dealer based out of Kolkata says, “Cement prices for retail buyers have come down to Rs 280-285 per bag and wholesale prices have fallen to Rs 275 per bag for Grade-A cement buyers. At present, sales have fallen and prices have been falling by Rs 5 per bag every week since the first week of June.”
A report released by Alchemy Share and Stock Brokers said, “Prices in Maharashtra remain at high levels due to supply issues. Demand remains weak owing to slow clearance of projects and onset of early monsoons, which affected repair work in Mumbai. Prices in Gujarat have gone down due to the high level of supplies. Cement markets are expected to remain weak until September. The cement price in Mumbai is at Rs 260-288 per bag in June, a drop of Rs 6-15.”
Cement stockists and dealers and analysts alike attribute the fall after a good pricing streak for the past four months to the inability of governments to announce new projects, while old ones are on hold. In TN, payments for contractors from the previous government are pending and contractors are unwilling to go ahead.
They expect payment clearance in another six months. Kerala has also witnessed a change in government and there has not been any new announcements. Analysts say no additional growth can be expected in the southern region for the next four months.
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