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Cement prices slip; East bears the brunt

November 24, 2008 10:29 IST

Cement prices in the eastern part of the country have softened by as much as Rs 10 - Rs 12 for a 50-kg bag over the last fortnight.

This is a relatively sharp decline compared to the northern and southern markets in the country where prices have fallen by only Rs 2 - Rs 4 a bag.

Kolkata-based dealers said that retail prices are now hovering around Rs 240 a bag due to a 10-15 per cent dip in demand.

Industry analysts said the fall in cement prices so far has been in line with expectations and companies might consider giving discounts to boost sales.

On the wholesale front, the prices in the east are ruling in the range of Rs 210 - Rs 230 a bag. Kolkata-based dealers indicated that companies such as ACC and Ambuja have reduced their billing rates by Rs 10 a bag.

Market sources said that companies such as Orient Cement -- a mid-sized cement maker -- are supplying cement for as low as Rs 210 a bag to dealers.

In the north, the big players have reduced prices by around Rs 2 whereas the mid-sized players have cut prices by Rs 3 - Rs 4 a bag. The wholesale price in Delhi is currently quoted in the range of Rs 215 - Rs 230 a bag.

H M Bangur, chairman and managing director of Shree Cement and president of Cement Manufacturers' Association, said, "Prices have softened as players want to clear the stocks."

Shree Cement is one the leading north-based cement players.  Similarly, Vinod Juneja, managing director of Binani Cement, had earlier said that the company was giving discounts to the consumers.

With retreating monsoon setting in the South, all the states in the region have seen sluggish demand in November so far compared to the last month.

Dealers confirmed that in Chennai, cement prices have softened by around Rs 4 to Rs 253-254 a bag on the wholesale front. On the retail front, prices are ruling around Rs 265 - Rs 280 a bag in Chennai whereas in Hyderabad it is around Rs 225 - Rs 240 a bag.

Western and central regions are the only markets where the cement makers have been able to maintain their prices. In Mumbai, the wholesale prices are still ruling at an all-time high of Rs 258 a bag on the wholesale front.

City-based dealers said that so far no signals have been given by the cement players for slashing the rates. In central part, prices are stable at Rs 205 - Rs 215 in the wholesale market at Indore and Bhopal after a drop of Rs 3 - Rs 5 a bag in October.

Dealers said that producers had indicated that prices would go up but they expressed scepticism on any rise.

Ramit Budhiraja, regional head (east), ACC, said that demand was rising in in states such as Bihar and Jharkhand.

Chandan Kishore Kan & Sohini Das in Mumbai/Kolkata
Source: