While the cement industry continues to face the heat of the rainy season and labour shortage due to coronavirus, it is expected that the demand will pick up after Diwali festivities.
While the cement industry continues to face the heat of the rainy season and labour shortage due to coronavirus, it is expected that the demand will pick up after Diwali festivities. “Shrinking cement prices and demand continued in the rain-hit month, August, a normal trend. Further, rising Covid-19 cases, unavailable labour and partial lockdowns persisted,” research and brokerage firm Anand Rathi said in a report on Friday, adding that dealers now expect demand to rise post-Diwali as labour will start returning to sites and construction sites will also restart. In August 2020, demand for cement slumped by 10-35%.
With a considerable dip in demand, most regions reported a fall in price with the exception of Eastern India which maintained a high cement price level at Rs 340-350 per bag. The region reported nearly Rs 20 per bag fall whereas. “Some prices in cities, however, rose, especially in the West (Surat). IIP data show July 2020 industry volume was down 13.7% on-year,” the report said. In Northern India, August trade prices in Jaipur slid by Rs 10-15 per bag with a demand slip of 15%. Dealers said that the rising gap between the Trade & Non Trade price is temporary. In Delhi, prices dived by Rs 8-10 per bag on-month in August and at Kota by Rs 40 per bag from May and June. However, with India being in Unlock phase 4 now and an improvement in labour situation with the start of new sites, dealers expect demand to rise.
In Central India, prices fell in the range of Rs 10-20 per bag. “Prayagraj continues to suffer from rising Covid-19 cases (demand shrank 20-25% m/m); Satna is faced with sand unavailability (demand fell 30-35% m/m). In Indore, firm demand persists,” the report said. In the west, demand in pandemic-struck Mumbai is anaemic at one-third the rate of January and February. On the other hand, in Southern India, Hyderabad and Karnataka cement prices fell by Rs 10 per bag. Dealers in the region also expect a rise only post-Diwali.