Shares of 10 cement companies rose on the Bombay Stock Exchange (BSE) after cement players indicated on Thursday the possibility of price rise in next few months.
Shares of Binani Cement on Thursday closed higher by 5.53% from the previous day’s close. Similarly, Saurashtra Cement shares jumped 3.15%, Dalmia Cement rose 5.27%, Prism Cement share increased by 1.58%, India Cements closed higher by 0.59%, Shree Cement surged 3.31%, UltraTech Cement rose 0.98%, Grasim Industries increased 0.48%, ACC shares ended up 0.57% and JK Lakshmi Cement closed up 4.42% on the BSE.
ACC Ltd’s shares surged after its managing director Sumit Banerjee was reported saying cement prices will go up. He, however, did not indicate how much prices could increase. Dealer sources say the prices could move up by another Rs 3-5 per bag next week. A recent Religare Capital Market report also hinted, with the busy construction season setting in, a marginal hike in cement prices cannot be ruled out. The January-March quarter has seen peak demand for cement, leading to enhanced utilisation levels across cement manufacturing units. Binani Cement MD Vinod Juneja said, ?I expect a price rise of Rs 3-5 per bag soon. As January to June is the peak construction season, demand for cement will go up. Moreover banks have come up with lucrative schemes for housing loans which is indirectly boosting the demand for cement.”
Industry players said the rise in price last month was from the shortage of railway wagons. However, there has also been increase in demand for the commodity due to construction work and for the 2010 Commonwealth Games. That, together with the fact that fuel costs have risen, has prompted producers to raise prices. Prices of imported coal have increased and are currently being imported at $90 per tonne from $50-55 per tonne in the month of September 2009. With growth in construction activity, the Indian cement industry witnessed a 10.2% year-on-year growth in despatches during the third quarter ending December 2009.
