Low demand pulls cement prices down

Our Corporate Bureau
13 November 2001

Mumbai: Following lower demands, cement manufacturers like Larsen and Toubro and Gujarat Ambuja Cements have reduced their selling prices by Rs 5 per 50-kg bag in the trade segment of Mumbai city.

As a result of the price reduction, cement prices fell by an average of Rs 10 to Rs 15 per bag in Mumbais retail segment. Following the cut, the prices in the trade segment currently rule at anything between Rs 152 and Rs 154 per bag, and in the retail segment they are ruling at anything between Rs 160 and Rs 164 per bag.

A few weeks back the price in the retail segment was ruling at around Rs 180 per bag. Even in the bulk segment, or the non-trade segment, cement prices have fallen by Rs 10 to Rs 15 per bag to about Rs 135 to Rs 138 per bag. Mumbai is the largest market for cement in the country, with an annual consumption of 3.50 million tonnes.

Sources in cement manufacturing companies described the fall in demand as a pure seasonal phenomenon. There is a lull in construction activities due to the ongoing festival season and demand is expected to pick up once the festive spirit dies down.

Cement manufacturers are confident of an 8-per cent growth in demand in the current year. The growth in demand is expected to come from the golden quadrilateral project, which is expected to gather speed and push the performance of cement companies in the second half.

In the first seven months (between April 2001 and October 2001) cement dispatches rose about 6 per cent, from 54.7 million tonnes to 57.70 million tonnes. In October 2001 itself, cement dispatches rose 7.60 per cent to 8.30 million tonnes in comparison to the 7.80 million tonnes in the corresponding period last year.