Cement prices in India face further rise

Following the price rise of imported coal, petcoke and crude oil due to the Russia-Ukraine war, cement prices in India are expected to increase by 6-13 per cent.

In the last six months, coal and petcoke prices have surged by 30-50 per cent, according to industry sources. A report by Indian analysts CRISIL, domestic cement prices are expected to advance a further INR25-50/bag in April as producers start to pass on rising costs to consumers. This follows a rise to INR390/bag in the past 12 months.

“Apart from the ever-increasing price of coal and pet coke, the cost of petroleum products like petrol and diesel prices is also increasing in the national and international markets, which very badly impacts the cost of production of raw materials of cement, packaging materials, production, transportation and distribution cost of cement,” said Vishal Kanodia, MD of Kanodia Cement.

“In FY23, cement volume growth will be stable at 5-7 per cent, driven by affordable housing demand from tier-2 and tier-3 cities, along with infrastructure. However, high construction costs will limit the demand uptick,” said Hetal Gandhi, director, CRISIL Research. Though demand had picked up by 20 per cent during the first half of FY22, the growth rate decelerated to seven per cent, owing to unseasonal rains, sand issues and labour shortage. The South India Cement Manufacturers Association (SICMA) has already come out in public stating that it is being hit by the main three input costs – fuel, power and transport. It also raised concerns about coal availability due to the ongoing war. Moreover, Sicma has also highlighted the limited stock availability with cement companies, reports Business Standard.