Demand for cement to grow by 8%
Kotak Securities (KS), the stock broking and distribution arm of the Kotak Mahindra Group, reports that demand for cement would grow by 8 percent during FY13 and due to slow growth of capacity additions, capacity utilizations would be improving further.
The research firm states that being driven by festive season, labor scarcity and also non-availability of power, the cement prices had sloped down to an average price of Rs 285 per bag for November 2012. But in the coming months the prices are expected to improve as demand is expected to grow by 8 percent.
The increase in demand expected would be due to revival in infrastructure impacted by delays in policy making, recovery in real estate sector led by reversal in interest rate cycle and increased demand from rural housing led by healthy monsoons.
Cement dealers expect the demand to grow by 8 percent and 8.5 percent during FY13 and FY14 respectively and expect capacity utilizations to improve from 77.3 percent in FY12 to 80.5 percent in FY14 and 84 percent in FY15 for the industry as a whole.
Northern region: It witnessed a hike of Rs 10 to 12 per bag during October 2012 while in November 2012 the prices started decreasing by Rs 15- 20. Prices would come up in the next few months.
Southern region: Cement prices in AP had a slump during September 2012, but soon it picked up speed, and it was increased by Rs 25 to 30.
In Kerala, cement rates remained firm and regions like Chennai and Kochi witnessed a decline of prices by Rs 10 to 15 per bag and are likely to firm up from mid of Jan, 2013.
In the Eastern region, the demand and pricing scenario stayed mixed. Kolkata witnessed decline of Rs 10-15 per bag while prices remained firm in regions like Patna, Bhubaneswar by Rs 10-15 per bag.
In Western region, cement prices remained stable in some of the regions with marginal declines witnessed in Mumbai and Gujarat due to low demand. However regions like Pune and Nagpur witnessed sharp fall in cement prices.
AP, Bhubaneswar, Cement dealers, cement prices, Chennai, Cochi, Eastern region, Festive season, Gujarat, Infrastructure, Kolkata, kotak mahindra group, Kotak Securities, Mumbai, Northern region, Patna, Pune, research firm, rural housing, Southern region, Western region
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