Cement prices to go up by Rs 10

Come January, retail cement prices are set to increase by Rs 5-10 per 50 kg bag across the country following a surge in construction activity.

The rise may be the sharpest in Mumbai, the largest cement market in the country. A leading cement stockist in the city said, "The pickup in December has been very good and therefore prices are likely to move up in the first week of the new year." Currently, retail price of a 50 kg bag in Mumbai is Rs 172, while the wholesale price is Rs 154-155.

Meanwhile, retail cement prices in Gujarat are also likely to rise to the level of Rs 130 from the current level of Rs 120 a bag.

"Prices in Gujarat have remained relatively lower owing to oversupply and underpricing by some players. However, with the increase in Mumbai prices, prices in Gujarat are also likely to rise," a cement sector analyst said.

Meanwhile, industry experts said the tsunami destruction may not have a significant impact on the demand scenario in the south.

"Since most of the houses which were destroyed were kaccha houses, it is unlikely that the southern market records a great construction boom. However, there will be a rise in demand, which will help to stabilise prices," a senior executive from a cement company said.

Earlier this month, retail cement prices in Chennai went up by Rs 20 per 50 kg bag, to stand at Rs 155. Prices in Kerela have also risen to around Rs 170. However, Andhra Pradesh continues to remain depressed with average retail prices in the range of Rs 140 for the 50 kg bag.

Cement markets in the north and east have witnessed a steady growth in demand leading to firm prices, with prices of the 50 kg bag in West Bengal touching Rs 180 levels.