India's cement production falls in April and May

India's cement production was down by 11 per cent MoM in April and 18 per cent MoM in May, due to the rise of COVID-19 cases and the subsequent lockdown restrictions by many states. However, notwithstanding the onset of the monsoon season, pent-up demand is expected to push volumes forward in the second quarter of the FY21-22.

As a result, ICRA ratings agency has revised its volumetric growth estimates for the fiscal year downwards to 10-12 per cent from 15 per cent.

Anupama Reddy, assistant vice president and sector head at ICRA, says: "Rural housing demand has been dampened by a sharp rise in COVID-19 infections in rural India during the second wave, even as infrastructure-led construction activity continued in April and May albeit with some moderation in productivity levels."

Elsewhere, input costs, such as coal, petcoke and diesel prices, have been rising over the last 2-3 quarters. The increase in the coal prices is driven mostly by higher demand from China and other Asian countries and are 54 per cent higher YoY in the 1Q22. The recent surge in oil prices also led to an increase in petcoke prices by 80 per cent YoY and diesel prices by 21 per cent YoY in the first quarter.