[ad_1]
As the assist from pent-up demand fades, the sequential quantity restoration has misplaced momentum in August. Consequently, cement prices have corrected across most regions in India. The newest sellers’ channel examine by Kotak Institutional Equities confirmed that all-India, excluding-South, common cement prices corrected by 2-3% to ₹366/bag. One cement bag weighs 50 kilograms.
“Dealers point out that easing up of the pent-up demand, intermittent regional lockdowns and a extreme monsoon have softened demand and impacted prices. However, prices stay up 5% year-on-year (y-o-y) resulting from a sharp 10% month-on-month hike in May 2020,” Kotak report dated 21 August mentioned.
Region smart, cement prices fell the most within the North by ₹10/bag to ₹353/bag, adopted by the West and the Central markets. In the East, prices declined the least, by ₹3/bag to ₹338/bag in August, confirmed the channel examine. It ought to be famous that September is a weak quarter for the sector and cement prices stay muted.
“August is seasonally the weakest month of the yr for cement volumes, weighed by heavy monsoon rainfall across most components of the nation. Data for the previous 25 years suggests August volumes are 12% decrease than the annual common,” Motilal Oswal Securities Ltd mentioned in a report on 25 August.
However, this time round, cement prices are anticipated to stay muted for longer on condition that demand revival could be extended, analysts cautioned.
In the June quarter, the cement sector noticed volumes decline round 30-50% on a y-o-y foundation. The efficiency of some south-focused firms was dismal on the volumes entrance. As per DIPP, demand declined 7% y-o-y in June 2020, recovering sequentially after a decline of 85%/22% in April/May 2020.
The street to restoration for cement demand is a lengthy one. Fading pent-up demand together with gradual pick-up in authorities initiatives would hold volumes development subdued.
[ad_2]
Source hyperlink