Cement Prices soften further in September - BRICS Cement Dealer Update

Prices in September have softened further (as we expected) in most regions (except Ahmedabad) after reaching all-time highs in July. Our interaction with cement dealers suggests poor demand in most regions as the main cause of this weakness. Key cement companies reporting negative dispatch growth numbers for August also corroborates a weak demand scenario. Despite price correction in Hyderabad, we continue to maintain that south is likely to see relatively stable prices compared with the rest of India. While prices could see some improvement after monsoons, we believe the oversupply situation should persist till the first quarter of FY15, thereby preventing any secular uptrend inprices. (All prices in this report are per 50 kg bag, unless otherwise specified)

- Hyderabad prices have decreased by Rs40 to Rs255 with demand remainingextremely poor.

- Bangalore prices were stable at Rs340. Demand seems enough to absorb supply.

- Chennai prices have fallen by Rs10 to Rs340 and demand continues to remainweak.

- Ahmedabad prices have increased by Rs8 to Rs316 after falling to Rs285 at the endof last month due to supply from Rajasthan.

- Mumbai prices are stable at Rs290. Demand is low due to heavy rains.

- Prices in Punjab have fallen by Rs12 to Rs265 (after Rs20 discount) despite effortsby players to raise prices. Demand is extremely poor.

- Kolkata prices are up by Rs5 to Rs355 (incorporating Rs10 discount) after fallingfrom a peak of Rs390 in July. Demand remains weak.

- Delhi prices were down by Rs20 to Rs270 while demand remained weak.

Source : Equity Bulls

Keywords