Cement prices dip further, marginal demand recovery noted: Nomura

Cement prices have dropped by Rs 10 a bag across the country with a slight uptick in demand, a recent note from Nomura has indicated. In the South and East India, the commodity turned cheaper by Rs 19 a bag and Rs 11 a bag, while in North, it was down by Rs 10 per bag, and by Rs 5 a bag in West and Central.

Unfavourable weather and elections affected demand in the South and East. Despite being below the 2QFY24 average, January’s average trade price stands at Rs 369 per bag. December showed slight demand growth after the state elections, except in the North due to cold weather and South due to flooding. Significant demand uptick is expected post mid-January, the report said.

In the South, prices dropped by Rs 19 in January, totaling a decrease of Rs 30 per bag since the previous quarter. Heavy rainfall in Tamil Nadu and reduced infrastructure spending in Kerala, Telangana and Karnataka contributed to subdued demand. Festivals in January might slow construction activities further.

In the East, trade prices dropped by Rs 11 per bag in January, down Rs 22 quarter-on-quarter. Despite a record hike in September, the prices continued to decline, with an overall reduction of Rs38/bag from October to January. December saw improved volumes due to price corrections, with expectations of further demand growth in January, it said.

The West observed a drop of Rs 5 in January, taking the total decline to Rs 13 per bag quarter-on-quarter. Marginal demand growth followed the Assembly elections in December, aiding construction. Expectations indicate increased demand in January as it’s a strong season, it added.

In the Central region, trade prices fell by Rs 5 per bag in January, down Rs 9 quarter-on-quarter. Marginal demand improvement post elections in Madhya Pradesh was noted, while infrastructure spending slowdown affected non-trade demand.

Housing activities and government spending are expected to rise after elections conclude. UltraTech dominates this region’s volume, the Nomura report said.

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