Cement prices to dip 1-3% this FY despite demand: CRISIL report – ET Infra

MUMBAI: After seeing a 4 pre cent compound annual growth rate (CAGR) over the previous four years and reaching an all-time high of Rs 391 per 50 kg bag last fiscal, cement prices are expected to decrease by 1-3% this fiscal.

Hetal Gandhi, Director – Research, CRISIL Market Intelligence and Analytics said, “CRISIL MI&A Research expects cement demand growth to be strong at 8-10% on-year this fiscal, the pre-election year. This, however, will not propel prices up. On the contrary, prices are set to decline by 2 per cent on-year to Rs 382-385 per bag, pulled lower also by relatively moderate growth in the trade segment.”

The Covid-19 problems were to blame for the run-up, which was then sharply followed by an increase in input costs, particularly thermal coal, which was made worse by the Russia-Ukraine war.

The trend is now expected to reverse due to increased competition intensity and declining input costs.

Due to gradually declining energy costs and manufacturers’ efforts to increase market share in a traditionally robust fourth quarter, prices have eased since early 2023. The average price decreased sequentially by 1 per cent to Rs 388 per bag in the fourth quarter of the previous fiscal.

Lower prices are also expected given the current state of the input market. For example, Australian coal prices fell in the third and fourth quarters of fiscal 2023 (by 10 per cent and 36 per cent on-quarter, respectively), following multi-year highs in August and September 2022.

  • Published On Jun 20, 2023 at 12:59 PM IST

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