Cement Manufacturers Started Offering Discounts
The slack in demand due to slower sales and tardy implementation of infrastructure projects has slowed demand for cement used to build reinforced concrete roads, dams, bridges and houses. Leading cement manufacturers have started offering discounts of as much as Rs 10-20 per 50 kg bag in the last two months as slow sales begin to result in inventory pile-ups. What’s significant about this price cut is that it has come even before the seasonal dip in sales brought about by the onset of the Southwest monsoon.
Pravin K Jain, executive president at Grasim Industries said, “cement demand is subdued across the country due to slowdown in real estate for various reasons like high interest rates on housing loans, lower sales among others. Also infrastructure activity has not picked up as expected thus leading to subdued demand.”
Bhagwan J Deokar, president at Builders’ Association of India said, “usually cement prices decline after the arrival of monsoon in June-July. This year prices have corrected by Rs 20-30 per 50 kg bag on account of lower demand.”
Sidharth Gupta at Mineral & Mining a Delhi based cement dealer said, “in north India cement prices had peaked to Rs 290-310 per bag during March from which it has come down to Rs 250-265. Cement prices started declining from April and in May also cement companies have offered discount of Rs five per bag.” He attributes the slack in demand to shortage of labour. “Most of the labourers are on leave due to the unbearably hot summer. Earlier labourers used to work for 14 hours a day which has been reduced to 8 hours per day,” he said.
In Tamil Nadu, prices declined by Rs 20 per bag. The production discipline has helped contain fall in prices in the South. Assembly elections in West Bengal too weighed on demand. Dispatches from eastern region declined by 12 per cent to 2.7 million tonnes in April compared to March, 2011, said the Karvy report.
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