Rains cloud cement prices

TRADE TALK/ Sanjay Ladiwala

Sanjay Ladiwala, president, Cement Stockist and Dealers' Association of Bombay, spoke to Chandan Kishore Kant about the trends in the industry.

What will be the price trend during the monsoon this year?

Cement prices across the country will decline except in the southern market. As the current retail prices have reached a saturation point, a further rise is not on the cards.

In the south, rates may go up as demand is surging and the retreating monsoon is expected only by October.

How will demand be affected during the season?

There would be a 30-40 per cent decline in demand across the country. In Mumbai, there will be 30 per cent decline as many construction projects will be put on hold during the monsoon season.

What's your take on the demand situation in Mumbai?

Compared with last year, cement consumption in the city has increased by 15 per cent from 5.4 lakh tonne to 6.2 lakh tonne per month. But, demand is 20 per cent higher than consumption.So, there is a gap in demand and supply in the market.

Your opinion on imported cement and how will it impact the market?

Right now, not a single bag of imported cement is available in the market as they are waiting for the green signal from the Bureau of Indian Standards.

Besides, our ports are not equipped to handle more than 3,000 tonnes of cement per day. Currently, imports do not pose a threat.

How much price cuts do you expect in the Mumbai market?

Currently, the average wholesale price is Rs 230-235 a bag. In the retail market, it is ranging between Rs 255 and Rs 260 per bag. I see a cut of around Rs 5-10 in retail rates during the monsoon. It will happen only in July as there is still a pent-up demand.

Your views on the upcoming capacities in the country? Will they create a glut?

The upcoming 100 million tonne facilities will quench the rising demand for cement in the country. I do not think there would be a glut in the market as infrastructure projects are given importance by the government.