Cement prices rise Rs 7/bag in September; further Rs 5-20 hikes expected in October: Report
New Delhi, September 29
Cement companies could attempt another round of Rs 5-20 per bag price hikes across most markets in October, although the ability to sustain the increases will depend on demand recovery and dealer acceptance, Centrum Broking said in a report.
"With fuel prices having increased sharply in recent weeks, the ability of companies to implement and sustain price hikes will remain a key monitorable," the report said.
The outlook follows a pickup in cement pricing momentum in September, with the all-India average trade price rising Rs 7 per bag month-on-month to Rs 356, after remaining largely flat during July and August.
Centrum said its channel checks showed that cement prices gained across both trade and non-trade segments during September, with non-trade prices seeing sharper increases in most markets.
However, the report noted that the higher company billing rates have not been fully passed on to customers in several markets, as dealers continued selling at earlier prices to meet quarter-end volume targets.
Centrum said demand weakness in Q2FY27 was less pronounced than the usual seasonal trend, with activity improving in several markets towards the end of the quarter, as it expects companies to make further price hike attempts in October. However, the sustainability of these increases will depend on demand recovery.
Demand remained range-bound in several markets during July-August, while September saw mixed regional trends. Higher rainfall affected activity in some markets, while lower rainfall supported construction activity in others, the report said.
Regionally, South India led September's price increase with an Rs 11 per bag rise, followed by West India at Rs 9. Central, East and North India each recorded Rs 5 per bag increases.
Despite the September recovery, the all-India average trade price for Q2FY27 was Rs 351 per bag, down Rs 1 per bag sequentially, as weaker pricing in July and August offset the September gains.
The report further said the success of October's price increases will depend on how demand develops and whether dealers are willing to accept higher prices, making demand recovery a key factor for the industry's pricing outlook.
— ANI
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