Mumbai, June 11: Cement prices are bound to harden again. Most cement manufacturers in Maharashtra appear to be poised to raise wholesale prices by Rs 3 per bag.
“As a result, cement prices in Mumbai will go up between Rs 245 and Rs 248 per bag,” said Sanjay Ladiwala of Cement Stockists Association.
The main reason for the hike is that the market is flush with a carry-forward demand. There is more demand than supply, said an industry analyst. Therefore, a rise in prices is not expected to affect demand.
According to industry experts, most cement manufacturers will be setting up their greenfield projects by 2008. So, they need to book profits now to raise investments for these projects.
The market is abuzz with the rumour that ACC and UltraTech could be looking at raising prices, but both companies have denied such a move.
“We do not comment on price sensitive information,” an Aditya Birla Group spokesperson said today. UltraTech Cement is an Aditya Birla group firm.
“Prices are quite firm at the moment but, as I have always maintained, cement prices depend on demand-supply and the market. I will not be able to say if the prices will go up or not, but I will not be surprised if they do,” said N. Srinivasan, managing director of India Cements Ltd.
Sector analysts said that unlike in the earlier years, cement prices will remain firm during this monsoon.
“There is no additional supply. There has been no capacity build-up in the last two years and logistics is still an issue. As a result, cement prices will remain firm even during the monsoons,” said an analyst.
If the prices do go up eventually, it will be in direct defiance of Union commerce and industry minister Kamal Nath’s directive on May 12 asking the cement industry to moderate prices.
Cement manufacturers have promised a 5 per cent discount on central government supplies.
The cement industry has unanimously declared the prices were rising because of genuine mismatch in demand and supply. “The glut in supply is due to increase in cost pressures, sustained infrastructure development and high capacity utilisation,” a sectoral analyst had pointed out while justifying the increase in prices.
