Pan-Indian cement prices fall by 5% in December

Cement prices declined by an average pan-Indian rate of five per cent MoM in December 2021, according to Emkay Global Financial Services.

Prices declined 6-7 per cent MoM in the east and south, while prices in other regions fell by 3-4 per cent, according to the report, while industry volumes likely increased by 25 per cent MoM.

Emkay Global Financial Services said all regions are likely to have witnessed 20-30 per cent MoM volume growth. There should be a YoY demand improvement in December across regions, except in the east, the brokerage added.

With demand recovering, companies have announced price hikes of INR10-30/bag (US$0.13-0.4/bag) across regions for January 2022. 

"We expect demand to pick up further (from mid-January 2022) after Kharmas, with an increase in government spending and an uptick in rural demand," Emkay said.

Margins are expected to bottom out in 3QFY22, with likely demand/price recovery. Cost inflation should ease off from the 4QFY22, with a 15-40 per cent decline in input prices (petcoke, coal, and diesel) from their recent peak, the brokerage concluded.