Cement prices may fall due to a slowdown from realty and housing sector as well as the planned capacity expansion by major producers, a leading cement manufacturer said today.
"The prices are not planned, they are based on market forces of demand and supply. The demand has come down since last year and prices are under pressure. Due to planned capacity expansion in the cement sector, there may be a reduction in prices," Shree Cement Executive Director M K Singhi told PTI on the sidelines of a conference organised by TERI here today.
The cement industry is expected to add a production capacity of around 25 million tonne per annum by the end of this fiscal, he said.
Due to a slowdown in realty and housing sector, the demand for cement grew by 6 per cent during April to August as against a 9 per cent growth it witnessed in the same period last year, Singhi said adding the slump will haunt the sector for in coming quarters as well.
Rising interest rates and inability of real estate companies to raise funds has led to the slump in the sector, he said. Cement prices have witnessed a decline of Rs 5 to 10 per bag.
Shree Cement has a capital expenditure of about Rs 200 crore for the current fiscal and aims to take the annual output to over 7 million tonne per annum by next year. It is targeting a growth in demand by 20 per cent, Sanghi said adding that every unit will have a captive power plant.