Ban set to dent cement

SECTORS IN THE NEWS

The government imposed a ban on cement exports on Friday to control inflation. Cement stocks remained sluggish following the news, though the country's cement and clinker exports account for only 3.6 per cent or 6 million tonnes of the total production.

Cement stocks in the F&O segment witnessed profit-taking and a build-up of short positions after reports of the ban, with open interest (OI) in Ambuja Cement rising by 6 per cent, while the stock declined by 4 per cent.

ACC witnessed profit-booking on Friday, with open interest declining by around 1 per cent and the stock dropping marginally by 0.18 per cent.

The ban will release 6 million tonnes of additional supplies of cement and clinker in the domestic market. The country's western region accounts for 94 per cent of cement exports and the ban will first impact prices in this region.

According to a cement analyst at Edelweiss Research, UltraTech (38 per cent) and Ambuja Cements (20.4 per cent) share more than half of the cement exports and will be the major losers. Grasim (11 per cent), ACC (9 per cent), Century Textiles and Kesoram Industries (6 per cent each) share 32 per cent of the total exports.