Mumbai (Maharashtra) [India], September 29 (ANI): Average trade prices of cement declined by Rs 3 to 5 per bag across regions this month, prompting experts to conclude that they will mark a fall of 3.7 per cent quarter-on-quarter during July to September.
The price gap between trade and non-trade cement remained wide in the north region at Rs 65 to 90 per bag, said a report by Emkay Global Financial Services released on Tuesday. "The cement manufacturers are likely to hike the price in Q3 FY21 or after the festive season," it added.
From the demand aspect, Emkay Global expects improvement in north, east and central regions. The demand could grow by 6 to 8 per cent year-on-year in the north and central regions with a volume growth of 2 to 3 per cent in the east.
In the east region, demand improved by 2 to 3 per cent year-on-year in August led by growth in Bihar, West Bengal and Jharkhand markets.
Significantly, average cement prices fell by 1.5 per cent, 0.5 per cent and 2.7 per cent in central, east and west markets respectively. And rose by 2.4 per cent and 10.8 per cent in the north and south markets.
As per core industries data, pan-India cement production declined by 13.5 per cent year-on-year in July. Based on interactions with channel partners, Emkay Global expects a volume decline of 9 to 10 per cent in August and 4 to 6 per cent in September.
Emkay Global said several cement companies have shifted to US coal which is 5 to 7 per cent cheaper than imported pet coke on landed basis. Sustenance of pet coke prices at high levels may impact operating costs by Rs 54 to 70 per tonne from mid-Q3 FY21.
High diesel prices which are up 11.6 per cent quarter-on-quarter may lead to an increase in freight costs by Rs 70 to 100 per tonne. The average pet coke price is up 11 to 14 per cent year-on-year.
The current average price of imported pet coke is 85 to 88 dollars per tonne compared to the average consumption price of 70 dollars per tonne in Q1. (ANI)