ACC, Ambuja Cements and Grasim Industries may soon cut cement prices as the commissioning of new plants has improved supplies and a late monsoon has slowed construction activities, thereby affecting demand, say cement dealers.

"Prices are likely to soften going forward," said Sanjay Ladiwala, president of Cement Stockists & Dealers Association. According to the Cement Manufacturers’ Association (CMA), about 110Mt of capacity could be added at an investment of about Rs 50,000 crore over the next three years.

"We still expect a healthy demand, but prices could come down by Rs 5 per bag in the next few weeks and another 4% by December depending on capacity additions," said Ajay Kapur, head (commercial and marketing) of Ambuja Cements.

A drop of INR5 will bring retail prices to INR260 per 50kg bag in Mumbai, Gujarat and the Southern India and to around INR250 a bag in the northern and eastern parts of the country. HM Bangur, managing director of Shree Cement and president of CMA said a fall in prices will erode profitability.

Source: The Economic Times