1. Cement demand likely to be muted y-o-y in June

Cement demand likely to be muted y-o-y in June

May 2017 saw price correction across majority of the markets from the highs of April, due to demand weakness and the government’s intervention to curb sharp price increases.

By: | Published: June 30, 2017 4:41 AM
Cement latest news, Cement price, Cement price latest news Cement demand likely to be muted y-o-y in June (GreenProphet)

May 2017 saw price correction across majority of the markets from the highs of April, due to demand weakness and the government’s intervention to curb sharp price increases. Price corrections have been the highest in the north, south and central markets, due to demand weakness in the central and south markets led by non-availability of sand. The trend of price weakness in these markets has continued into June 2017. Pricing in the eastern market has been largely stable, barring some correction in Chhattisgarh. The west market has been the only exception, where prices increased as late as the first week of May 2017. Gujarat has seen price increase in the month of June 2017as well. Additionally, June 2016 was a very heavy month in terms of volumes on account of higher construction activity in the north and central markets due to delay in the onset of the monsoon. Hence, a heavy base, along with demand uncertainty in June 2017 due to GST implementation, is likely to keep demand muted on a y-o-y basis. We expect price correction, particularly in the north and central markets, in the monsoon this year (unlike last year, when there was no price correction) due to weak demand conditions and ramp-up of JPA’s assets acquired by Ultratech in H1FY18 in the north and central markets. Against the backdrop of weak demand/pricing this monsoon, in the event of correction in stock prices, we would prefer names with good long-term earnings

We expect price correction, particularly in the north and central markets, in the monsoon this year (unlike last year, when there was no price correction) due to weak demand conditions and ramp-up of JPA’s assets acquired by Ultratech in H1FY18 in the north and central markets. Against the backdrop of weak demand/pricing this monsoon, in the event of correction in stock prices, we would prefer names with good long-term earnings prospects, and advise investors to gain exposure to Dalmia Cement, Birla Corporation, Ramco Cement,JK Cement and Shree Cement. All-India cement prices witnessed some decline in May 2017 from the highs of April 2017 due to demand slackness and the government’s intervention toward end-April against the steep price increases initiated in most regions. Both demand weakness and government pressure resulted in price correction in most markets, with all-India average price declining 1% MoM in May 2017. The trend of price weakness has largely continued in

All-India cement prices witnessed some decline in May 2017 from the highs of April 2017 due to demand slackness and the government’s intervention toward end-April against the steep price increases initiated in most regions. Both demand weakness and government pressure resulted in price correction in most markets, with all-India average price declining 1% MoM in May 2017. The trend of price weakness has largely continued in month of June 2017. After seeing a sustained rise since February 2017, cement prices in the north fell by 2% MoM in May 2017 and further by ~1-2% in June 2017. Prices in the south, which had increased strongly in the first week of April 2017, fell by over 3% MoM in May-17, led by price declines in AP/Telangana.

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