Cement demand grows by 12.6 per cent

March 11, 2010 7:34 am

“Due to water shortage, no major project was initiated in some parts of Rajasthan. While prices in south have risen by Rs 5 to Rs 15 a bag.”
 
Cement dispatches by major manufacturers grew by a healthy 12.6% year-on-year in January at 18.2 million tons. Cement production too registered a 12.8% growth. The figures look even more impressive against the backdrop of the massive 23.6 million tons of fresh capacity addition over the past 10 months and the price rise affected by cement companies.
 
According to analysts prices in February have risen Rs. 5-10 (per bag of 50 kg) across all regions. Demand during January-February has picked up as normally seen at this time of year, chiefly due to an upswing in construction activity from both government projects and real estate activity. Dealers expect strong demand and see no falling of prices in the near term. 
 
The central and western regions grew 14.3% and 13.1% (y-o-y), respectively. After rising an average 7% through April-December, dispatches in the southern region grew 12.9% (y-o-y) in January, according to the Cement Manufacturers Association (CMA). 
According to industry sources the south’s growth is notable as it has been reeling under massive capacity additions during the past few months. With 24 million tons fresh capacity coming into the national market, south India alone saw more than half of the fresh capacity. 
The capacity utilisation for the country stood at 92% as against 93% y-o-y and 91% month-on-month (m-o-m). At 76%, the southern region recorded the lowest utilisation and at 116%, the central, the highest.
 
According to industry sources, prices in the northern market were up by Rs 4 to 5 a bag. A report mentioned that as usual, demand has picked up in February. Due to water shortage, no major project was initiated in some parts of Rajasthan. While prices in south have risen by Rs 5 to Rs 15 a bag, a slight demand pick-up has been supporting the price rise. In the eastern market, the price increase has been Rs. 4 to Rs. 5 while in Raipur it is higher at Rs 7 to 8. 
 
In the west, the price rise has been in the region of Rs. 4 to Rs. 5, except Pune where it has been stable. Demand which picked up in January is slowing down, especially in Mumbai market due to shortage of sand.