Cement Prices Plunge in South India, But Rebound Expected in Q1

South Indian cement prices fell sharply at a glance in March and at a bigger pinch than other regions owing to year-end volume pressures and competition. However, industry experts expect a price recovery in the first quarter of the new fiscal year.

Cement prices witnessed a mixed trend across India, analysts said. In March the all-India average retail price eased marginally by ₹1 per 50kg bag to ₹366. The largest drops were seen in South India, with a decline of ₹7 per bag. North India continued to witness no change in the rate while a ₹4 cut was reported in Central and West India. Only East India registered a rise of ₹9 per bag.

Among states, the price increase in Jharkhand was the highest at ₹15 per bag, while in Bihar, Chhattisgarh and West Bengal, it was ₹10. In comparison, Madhya Pradesh and Gujarat posted drops of ₹10 per bag. Maharashtra, on the other hand, kept its prices stable for the second month in a row.

Before March, cement prices had been stable for two months in South India but have now declined. Prices fell by ₹10 a bag in Tamil Nadu, Andhra Pradesh and Telangana but by ₹5 in Kerala. Karnataka was not impacted, squirrel users said.

But despite the decline, industry leaders say that demand is strong and the price drop is temporary. “This decline is mostly the result of year-end volume pressures and excess capacity in the region. Prices had also fallen in October and November but bounced back in subsequent months. “We are expecting a similar recovery in Q1,” a senior executive with a leading cement company said.

Another industry executive noted that prices have dropped in South India, but average price drops remain in the range of 2% to 5%. “Price movements are disparate from district to district which makes it a bit difficult to quantify figures,” said the official.

Analysts expect price hikes to be announced by cement companies in April, with states in South India likely to see the steepest increase.