Retail cement prices in Mumbai, the country's largest market, have crashed by Rs 7-10 per 50 kg bag following heavy discounts being offered by the leading cement companies.
Though the official prices still remain at the same Rs 165-168 per cent levels, steep discounts have lowered the levels to around Rs 155-158 per bag.
Cement dealers said the discounts are being offered due to the weak demand during the monsoon. "As the companies are offering us a discount, we are passing it down to the customers," a leading dealer said.
Contract prices, the prices at which cement is offered to builders and other bulk buyers, have dropped to Rs 140-143 from the previous price level of Rs 153. To some bulk buyers, cement has even been at Rs 130 a bag, dealers said.
According to a senior official of a leading cement manufacturing company, low demand due to monsoon and the ongoing festival season have prompted the discount drive.
"However, this is a temporary measure to overcome the present situation as the demand could soon pick up," he said.
According to analysts, cement prices are under pressure primarily following a dramatic increase in supply. They also feel that a crack in the alleged cement cartel between leading players has become evident.
The marketing head of a city-based cement company said they would consider a possible price increase in the beginning of September as by then they feel that the demand scenario would firm up.
