Cement
production increased by an impressive 14.2 per
cent and consumption grew by an even more impressive
17.3
per cent in October 2004. Cement prices continued
to decline in most of the centers across India
in November. However, these are not expected
to fall
further and should remain stable in the ensuing
months. ACC and Gujarat Ambuja have hiked cement
prices by
Rs.5 per 50 kg bag in Mumbai. There have been reports
that some other companies may also increase prices.
However, cement prices in the past have not been
able to sustain higher levels. Demand for cement
is price elastic, ceteris paribus. The small shelf
life of cement puts pressure on prices if supply
exceeds demand. Prices are expected to remain weak
during the remaining months of 2004–05. However, these may strengthen as the new investments in the economy gain momentum. Cement production is expected to grow by six per cent to around 1246 lakh tonnes this year.
Cement
production picked up in September and October
2004. It grew by a robust 11.7 per cent and 14.2
per cent to 98.4 lakh tonnes and 107.5 lakh tonnes
respectively. This rise in production is complemented
by an even more impressive rise in consumption
of 11.2 per cent to 96.9 lakh tonnes and 17.3
per cent to 102.5 lakh tonnes, in September and
October 2004. Average capacity utilization has
also gradually risen over the preceeding months
to 85.3 per cent in October 2004.
This
year the offtake of cement continued to remain
robust on the back of firm year–on–year
cement prices, growing domestic demand and greater export realisation. The
rise in exports can partly be attributed to the demand accruing from the Middle
Eastern
countries. Sales grew by a robust 12.4 per cent as against a modest 3.2 per
cent growth seen in the corresponding period of the previous fiscal.
Contributed by:
Disha Thakur
MBA (HR), SIBM
