Cement: Cumulative Production Declined 1.6% During Apr-Oct’17

The cement industry is going through a difficult phase as prices continue to remain depressed amid low demand. Analysts and manufacturers now expect any reversal to occur in the next quarter of the fiscal (Jan-Mar) against an expected rebound in the present quarter. A part of the 8 core industries, cement production has declined 2.7% in Oct’17 over the same period previous year, according to the commerce ministry. Its cumulative production declined 1.6% during the Apr-Oct period compared with the corresponding period previous year. According to data from research firm Icra, production during the first seven months of 2017-18 was 165.6 MT compared with 168.3mt a year ago. The offtake during the period was weak on account of slow real estate activity, shortage of sand and trailing effects of GST implementation. The fallout of the low demand is the depressed prices. According to estimates by Motilal Oswal, average national prices of a bag have declined from Rs 304 in May to Rs 284 mid-Nov. Prices in the north, west, east and central have been largely flattish month on month. But, prices were lower in the southern markets of AP & TS, pulling down the national average. Daga said that improvement in sand availability will bring about a surge in demand in various regions where there is pent up demand and stalled work could get a boost. “We are positively looking at a revival of cement demand.” he said. The industry, Daga said, is debating on changing its fuel mix from petroleum coke to domestic coal.