As per our latest channel checks, cement demand across regions remained subdued, partially due to the gradual advent of rains and also for the general slowdown in construction activities. As a result, cement prices declined by INR3-25 per bag in the trade segment and by INR5-35 per bag in non-trade segment over the month. The highest decline was seen in North by ~INR5-35 per bag. The gap between trade and non-trade prices too has widened. This, if persists, will likely pull down the trade prices as well. However, the current all India average price is higher by ~1% as compared to Q1FY13 average. Further, price declines are expected in North, Central, East and West even as South may remain flat.
��July industry despatches estimated to rise ~2%-3% YoY
Industry despatches for July 2012 are expected to rise by ~2%-3% YoY. Despatches of cement majors (ACC, Ambuja and Shree Cement combined) have grown at 2.4% YoY. Industry utilisation is expected to be ~71%-72% versus ~74%-75% estimated for June 2012. Note: CMA has stopped reporting industry data since June 2012.
Region-wise summary – Key highlights
We surveyed 29 cities across India to get the region-wise demand and price trends in both trade and non-trade categories. Key highlights are as follows:
North: On a downward trend
As compared to prices on July 13, 2012, cement prices have declined by ~INR5-25/bag in the trade segment and by ~INR10-35/bag in non-trade across the region. Current prices in North are hovering around the Q1FY13 average. Onset of monsoon has impacted demand as dealers now expect a further decline of ~INR5-20/bag in the coming weeks.
East: Subdued demand
Current prices in the region are down by ~INR5-25/bag in both trade and non-trade as compared to last month (the average price is down 2.1% compared to the average of Q1FY13). Dealers expect a price decline of INR5-15/bag in cities like Bhubaneshwar, Durg and Raipur.
South: Flat scenario to prevail
Over the month, prices increased by ~INR3-18/bag in the trade segment and by ~INR10-25/bag in non-trade in Hyderabad and Bangalore while prices in Chennai and Cochin remained flat. The current average price in the region is up 1.2% as compared to the average of Q1FY13. Dealers expect prices to remain stable across the region except Chennai where a decline of ~INR5/bag is expected in the coming weeks.
Regards,
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