Reasons for declining cement prices in India

Cement prices in India have seen a noticeable downturn recently, driven by various factors. Initially, a strategy focused on boosting sales volume rather than keeping prices high led to a sequential decrease of around 6% in cement prices during the fourth quarter. This trend continued throughout the fiscal year, with prices dropping by Rs 40-Rs 45 per 50 kg bag nationwide by March 31.

The most significant price declines have been observed in the eastern market, where demand is subdued due to tightness in the money market and delayed payments from state governments. Prices in this region fell by 6.5% to Rs 316 per bag. Attempts to raise prices in early April were unsuccessful, indicating resistance from the market.

Several factors have contributed to the overall decline, including weak demand due to rising temperatures, the ongoing general election, labor shortages, liquidity issues, and challenges related to resource availability such as sand and water in certain regions.

Looking ahead, analysts foresee a potential increase in construction activity before the onset of the monsoon season, driven particularly by demand in the housing sector. However, the election period and impending monsoon may temporarily slow down this momentum.