Cement prices in northern states of India are expected to rise on the back of rising costs brought about by a ban on the use of petcoke in the Delhi NCR region from November 1, according to India Ratings and Research.
Petcoke is a key raw material that goes into the making of cement.
“Cement players in the northern region particularly from Rajasthan (where most of the clinker plants are situated) will have to use either domestic coal or imported coal from 1 November 2017. This will result in an increase in power and fuel cost per tonne per bag by INR8-10,” Ind-Ra said in a release.
Cement producers are likely to pass the hike in costs to the final consumer, leading to an increase in cement price.
According to Environmental Pollution (prevention and control) Authority’s clarification dated 27 October 2017, such ban will be applicable only in those districts of Uttar Pradesh, Haryana and Rajasthan which fall under NCR; however if the state governments fail to issue a similar notification, then the ban will automatically be applied to the whole state, impacting all cement manufacturers. Industries using pet coke and furnace oil will have to comply by the norms issued by Central Pollution Control Board latest by 31 December 2017.
The top court of India had last week banned the use of petcoke and furnace oil by industries in Haryana, Rajasthan and Uttar Pradesh in a bid to control air pollution in the Delhi-NCR region which also saw the apex court banning the sale of firecrackers to contain unprecedented air pollution in the national capital and its neighbouring regions.