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Cement prices across regions continued their upward trend, rising by
~INR5‐35/bag, revisiting the peak of March 2011. The seasonal uptick in
industry despatches in October (wherein industry utilisation rose to 76%
from 64% in September) along with disciplined supplies helped sustain the
price hike. Supplies in the non‐trade segment have resumed in North and
Central regions, but in smaller quantities and against full advance payment.
With demand in November, so far, yet to pick up post Diwali, the
announced price hike of INR10‐15/bag may get deferred.
October despatches up 0.6% Y‐o‐Y despite high base
Industry despatches for October were above expectation at 18.13mt, up 0.6% Y‐o‐Y
despite a high base. MoM, despatches surged 13.4%. YTD FY12 despatch growth
remains muted at a mere 2.6% Y‐o‐Y. Volume growth for November is estimated to be
robust due to low base last year. (In November 2010, industry volumes declined by 6%)
North: Prices surge
Post Diwali, prices have inched up further by ~INR 5‐10/bag (despite supplies resuming
in the non‐trade segment, except in Punjab) taking the total price hike to ~INR15‐
35/bag in the past one month. Quantities in the non‐trade segment are low currently as
supplies have opened only against advance payments. The last price hike of ~INR10/bag
has been absorbed with a lot of resistance. Further price hike of ~INR10‐15/bag will be
difficult to be passed through without improvement in demand. Prices in the region are
back to at all time high (refer table 3 for comparison).
East: Demand yet to pick up post Diwali
Dealers convey low demand post festivals of Diwali and EID across the region. Prices
have surged by ~INR25‐40/bag in the last one month and further hike of ~INR10/bag is
expected in the coming days. Prices are back to previous peak levels in all major cities,
except for Patna where prices are~INR10/bag away from their peak (refer table 5 for
comparison).
South: JSW Cement enters Chennai market
JSW Cement, though in smaller quantities, has entered the Chennai market and is
pricing its products aggressively. With monsoon setting in and increase in volumes
expected from JSW Cement in November, prices are likely to be under pressure. Prices
in Hyderabad (South) have corrected by ~INR 5/bag in November so far, partly
reversing the increase of ~INR10/bag in October on account of muted demand and
continued agitation on Telangana issue
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cement prices across regions continued their upward trend, rising by
~INR5‐35/bag, revisiting the peak of March 2011. The seasonal uptick in
industry despatches in October (wherein industry utilisation rose to 76%
from 64% in September) along with disciplined supplies helped sustain the
price hike. Supplies in the non‐trade segment have resumed in North and
Central regions, but in smaller quantities and against full advance payment.
With demand in November, so far, yet to pick up post Diwali, the
announced price hike of INR10‐15/bag may get deferred.
October despatches up 0.6% Y‐o‐Y despite high base
Industry despatches for October were above expectation at 18.13mt, up 0.6% Y‐o‐Y
despite a high base. MoM, despatches surged 13.4%. YTD FY12 despatch growth
remains muted at a mere 2.6% Y‐o‐Y. Volume growth for November is estimated to be
robust due to low base last year. (In November 2010, industry volumes declined by 6%)
North: Prices surge
Post Diwali, prices have inched up further by ~INR 5‐10/bag (despite supplies resuming
in the non‐trade segment, except in Punjab) taking the total price hike to ~INR15‐
35/bag in the past one month. Quantities in the non‐trade segment are low currently as
supplies have opened only against advance payments. The last price hike of ~INR10/bag
has been absorbed with a lot of resistance. Further price hike of ~INR10‐15/bag will be
difficult to be passed through without improvement in demand. Prices in the region are
back to at all time high (refer table 3 for comparison).
East: Demand yet to pick up post Diwali
Dealers convey low demand post festivals of Diwali and EID across the region. Prices
have surged by ~INR25‐40/bag in the last one month and further hike of ~INR10/bag is
expected in the coming days. Prices are back to previous peak levels in all major cities,
except for Patna where prices are~INR10/bag away from their peak (refer table 5 for
comparison).
South: JSW Cement enters Chennai market
JSW Cement, though in smaller quantities, has entered the Chennai market and is
pricing its products aggressively. With monsoon setting in and increase in volumes
expected from JSW Cement in November, prices are likely to be under pressure. Prices
in Hyderabad (South) have corrected by ~INR 5/bag in November so far, partly
reversing the increase of ~INR10/bag in October on account of muted demand and
continued agitation on Telangana issue
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