Cement is about to become costlier in India
What's the story
Cement companies are likely to raise prices by ₹5-20 per bag in October, a report by Centrum Broking has said. The forecast comes after a surge in cement pricing momentum this month, when the all-India average trade price increased by ₹7 per bag month-on-month to ₹356. This follows a period of relative stability during July and August.
Market trends
Regional variations in cement price hikes
The report also highlights regional variations in cement price hikes.
South India led the way with an ₹11 per bag increase, followed by West India at ₹9.
Central, East and North India recorded smaller increases of ₹5 per bag each.
Despite these regional differences, the overall trend points to a significant rise in cement prices across the country.
Market dynamics
Demand recovery and dealer acceptance crucial for price hikes
The report emphasizes that the ability of companies to implement and sustain these price hikes will depend on demand recovery and dealer acceptance.
"With fuel prices having increased sharply in recent weeks, the ability of companies to implement and sustain price hikes will remain a key monitorable," it said.
This highlights the delicate balance between rising costs and market response in the cement industry.
Pricing strategy
Dealers selling at earlier prices to meet quarter-end volume targets
The report also notes that higher company billing rates have not been fully passed on to customers in several markets.
Dealers have continued selling at earlier prices to meet quarter-end volume targets.
This strategy has prevented a complete transfer of the increased costs from companies to consumers, further complicating the pricing landscape in the cement industry.