Ris­ing cost of in­puts pres­sure ce­ment com­pa­nies

Maritime Gateway - - Commodities And Cargoes -

De­spite a ro­bust de­mand, ce­ment com­pa­nies’ prof­its are ex­pected to come un­der pres­sure in June quar­ter due to a sharp rise in in­put costs es­pe­cially that of pet coke and diesel. Led by a sus­tained pick-up in in­fra­struc­ture spend­ing and firm ru­ral de­mand, sales vol­ume of top ce­ment pro­duc­ers are ex­pected to regis­ter an av­er­age 20 per cent growth in the June quar­ter.

How­ever, the av­er­age ce­ment prices dur­ing the quar­ter was down five per cent year-on-year even as cost pres­sures in­creased due to high en­ergy prices and de­pre­ci­at­ing ru­pee. The all-in­dia av­er­age ce­ment prices de­clined by ₹3 per 50 kg bag to ₹328 in June, af­ter a ₹4-5 in­crease in the pre­vi­ous two months. Pet­coke prices have been in­creas­ing for the last 15 months and ce­ment com­pa­nies have man­aged to pass on the in­cre­men­tal cost par­tially by hik­ing ce­ment prices. How­ever, af­ter a cer­tain level they were not able to in­crease prices due to ex­cess sup­ply in the mar­ket. The sec­tor is bogged down by ex­cess ca­pac­ity.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.