Cement prices go up by Rs 35 in Q1

Fall in despatches & increasing supplies to other states by Andhra firms propel price hike

A fall in cement despatches and increasing supplies to other states by the cement companies in Andhra Pradesh has seen the cement prices rise by Rs 35 per bag in the first quarter, when compared to the same period in the last fiscal.

The total cement despatches fell by eight per cent from 28,32,752 tonnes to 26,04,781 tonnes during April-May of this fiscal as compared to the corresponding period of last fiscal.

The cement prices per bag went up and hovered over Rs 125-150 during the just concluded quarter, as compared to Rs 95-115 in the first quarter of the last fiscal.

According to cement industry observers here, the rise in cement prices was due to the increasing supplies from the Andhra Pradesh cement companies to other states. Save for Andhra Pradesh and Chhattisgarh, there is almost no demand-supply gap in other states and any demand for more cement would have to come from these two states, they observed.

Hitherto confined to the neighbouring states in the south, the cement supplies from the state are going as far as Gujarat, UP, MP, Goa, Maharashtra, Pondicherry etc. Thus with fall in despatches by the state players, it was natural that prices would be north-bound, they said.

Besides, the supplies from the units outside Andhra Pradesh into the state fell to 3,43,441 tonnes during the first quarter of this fiscal from 3,94,240 in the corresponding quarter of last fiscal. Similarly, the supplies made by the cement units in Andhra Pradesh within the state also fell to 22,61,340 tonnes from 24,38,512 tonnes.

The exports by the Andhra Pradesh units, which took place last year after a decade's gap, were 1.5 lakh tonnes of clinker and 13,000 tonnes of cement during the first quarter of this fiscal.

The exports were said to be destined for Bangladesh. The figures are not comparable with the first quarter of last fiscal since the exports during the last fiscal took place only in the third and the fourth quarters.

Now, with enquiries for cement pouring in from North Africa, Australia and the Gulf, the cement companies are said to be demanding $42 per tonne (freight on board).

"Though the importers are negotiating for $38 per tonne, we are firm and also confident of realising the same price of $ 42 per tonne already being realised by the Gujarat-based companies," a cement company chief said.

Strike causes Rs 10 price hike

Following the truckers' strike, the cement prices have gone up by Rs 7 to 10 across the state. As the cement companies effected a price hike of Rs 15 per bag from Wednesday, the prices are further slated to go up in the next couple of days.

According to sources in the industry, the effective price per bag after the managements' decision would be Rs 139 in Hyderabad and Vijayawada, Rs 146 in Visakhapatnam and Rs 149 in Srikakulam.

The retail prices would be higher by Rs 7-10. It may be recalled that Business Standard reported recently that the cement prices were likely to go up by over Rs 10 in the likelihood of transporters' strike from August 21.

According to sources, the prices are likely to inch up by Rs 2 every couple of days during the strike period.

The strike is effective only in Andhra Pradesh in the south and it is likely to commence in a day or two across the south, they said, adding that the companies in the other southern states had already informally agreed to hike the prices by Rs 10 per bag as and when the strike commences there.