While other cement companies are likely to follow suit, analysts indicate that the price hike is likely to have a ripple effect across all cement markets in Maharashtra and southern Gujarat.
The recent hike comes after a Rs 7 per bag upward price revision that was effected in end-July, which followed significant attempts to revise prices in order to cover up the expected industry slump during the monsoons.
Gross cement prices in Mumbai now stands changed to Rs 135 per 50 kg bag, which is up almost 10 per cent from Mumbai prices in June. According to the industry sources, the present prices are approximately Rs 23-27 lesser than the prevailing prices last year during the same time.
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Prior to this, cement industry was ailing with prices dipping to around Rs 120 per bag in the city. This was primarily caused by smaller cement companies dumping in the local market causing excess supply over demand.
Prices in other parts of Maharashtra have traditionally been around Rs 4-5 a bag lower than that in Mumbai but analysts are now expecting that the difference will get bridged.
Earlier the industry was affected by drought in the western regions of the country. The government had imposed restrictions on construction activities in an attempt to save water.
With such a depressing situation and a groaning price scenario, companies had lowered production levels making the situation conducive to price rise. Demand in Gujarat had been falling at around 15-25 per cent in the April-May period, but has seen a correction in prices in the state which now around Rs 128-130.