Coal news and updates

March is leaving cement industry watchers quite confounded. Price hikes are a no-no in the last month of the financial year as they bog down sales and make achieving year-end targets tougher.

 

But cement players in the north have decided to take a different trajectory this time – raising cement prices not once but twice in this month.

 

On the other hand, cement prices in the south continue to head further in the direction of the peninsula, eroding by Rs. 5-10 per bag.

 

Companies were unable to effect any price hikes in the north during November-January as demand crashed because of demonetization and then construction activity slackened further due to elections in five states including the large and politically most significant Uttar Pradesh. In this period, input costs like those of coal, pet coke and freight also rose.

 

After undertaking a Rs. 10-15 price hike at the start of the month, cement companies have again raised their product prices in the north – this time by Rs. 10 per bag. A bag of 50 kgs now costs anywhere between Rs. 300 and Rs. 330.

 

“Large, well-known brands like UltraTech, Ambuja and ACC now come for Rs. 320-Rs. 330. All others, say Birla, Shree, JK are being sold for Rs. 300-310,” a dealer selling multiple brands told Moneycontrol.

 

A senior official with JK Cement told Moneycontrol the company had not hiked its prices again but the hike was being felt with a lag as it had not been able to push the first hike in certain markets in one shot.

 

“So it was only one hike that has happened but it got staggered as we were not able to push it in all the markets at the same time,” he said.

 

While cement companies in the north are busy passing on the pressure of input costs to consumers, those in the south are not so lucky.

 

Excessive hard selling by smaller players, extreme dry conditions, subdued demand and some dumping from manufacturers based in Gujarat has forced the cement makers in the south to cut prices by another Rs. 5-Rs. 10.

 

Thus while the north market is sitting on twin prices hikes this month, the south is depressed by as many cuts in the same time period.

Source: Moneycontrol.com