03 Jul , 2021 By : Kanchan Joshi
MUMBAI : Cement demand saw a healthy uptick in June with ease of economic restrictions in several states. However, extreme rains in select pockets especially in eastern and western regions impacted economic activities, said Reliance Securities Ltd.
According to channel checks done by the brokerage firm, cement sales volume improved by 10-30% on a monthly basis in June supported by pre-monsoon and pent-up demand. Analysts at Reliance Securities Ltd expect all-India average price to have improved by 5.2% quarter-on-quarter in the first quarter of FY22, mainly aided by sharp improvement in the southern region.
“All-India average cement price remained at Rs335-340 per bag in June, mainly supported by 2.6% month-on-month improvement in the Northern region. Average prices in Southern, Eastern and Western regions contracted by 1% MoM, while the prices ended on a flat note in the Central region," it said.
While a sharp increase in sand prices started weighing on cement demand in certain pockets, the dealers remain confident of sustained volume in the coming months, which albeit depends on the intensity of monsoon.
Non-trade prices continued to remain resilient during the month, as they were relatively less volatile compared to trade prices. While the average difference between trade and non-trade prices witnessed marginal contraction, the pricing differential remains in the range of Rs30-80 per bag, the brokerage firm said.
Analysts also said that price hikes taken at the beginning of June were rolled back subsequently, as the demand was not supportive enough to sustain higher prices.
While dealers expect fresh price hikes in the range of Rs10-20 per bag in the coming days in most pockets, analysts said that it is unlikely to happen due to monsoon impact. “We believe the companies would focus more on sustaining the current pricing at least for next two months," the brokerage firm added.
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