Adversely impacted by heavy rains and sand mining issues, cement industry’s volumes seems to have slowed down to 22 million tonnes during August, but is expected to improve from October as construction activities resume post monsoon, says a report.
According to ICICI Securities, the volumes have been impacted primarily due to decline in cement growth in the north and the central regions. These regions have likely seen a decline of 5-7 per cent in August compared to same period year-ago, due to heavy rains and sand mining issues.
Meanwhile, the eastern part of the country continued with its growth momentum with 6 per cent in the last month over the same period a year ago.
The southern region also appeared to have grown 5-6 year- on-year on low base from last year, it said.
“Our channel checks suggest cement industry volumes are likely to have grown in low single-digit year-on-year to 22 million tonnes during August (production grew 1.4 per cent year-on-year during July) impacted by heavy rains and sand mining issues, particularly in the North and the Central regions,” ICICI Securities said.
However, it said volumes and prices are expected to improve from October as construction activities resume post monsoon.
Further, the report said the “average pan-India prices, which saw an estimated 3 per cent month-on-month decline in July, further declined by 1-2 per cent month-on-month.
“While petcoke prices have risen by ~80 per cent over the past six months and the same is likely to impact margins in a seasonally weak period, we expect it to be passed on to consumers in the medium term,” it added.