Cement (Sep 2010 despatches: no meaningful recovery yet):
- The initial set of cement despatch numbers for September 2010 indicate despatch growth of 5-7% YoY for the industry.
- Severe floods in north India and sluggishness in infrastructure segment are likely to have led to muted growth, despite a low base (industry despatches had risen 6% YoY in September 2009).
- Cement prices in the southern markets have shot up 50-80% in the past one month, as producers refrained from under-cutting; prices in other regions have increased by 2-15%.
- We believe this pricing discipline will be tough to sustain, as demand continues to fall short of supply.
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