Cement prices up by 6% YoY most likely: ICICI Securities Report ...

Cement prices up by 6% YoY most likely: ICICI Securities Report

Led by strong demand in Bihar, Jharkhand and Odisha and backed by increased government spending on road, housing and hospitals,
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Cement prices up

Cement prices up by 6 % YoY  and 7 per cent on QoQ basis is predicated in areport by ICICI Securities. It was stated in a  report that  across the country average cement prices are expected to rise. This is despite volume decline in the southern and central regions,.

However, for the key building material the eastern region is likely to see a strong growth in demand, it said.

The rise in demand is led by the western region where prices are likely to be up 10 per cent YoY and 15 per cent QoQ. Prices across other regions are likely to be up 3-7 per cent both YoY and QoQ.

In the north Indian market in Q4FY17, the average cement prices stood at Rs 283 per 50 kg bag. In Q4 of the last fiscal, cement prices per bag, among other markets, were Rs 292 in the east. It was Rs 268 in the west, Rs 298 in the central, Rs 322 in the southern market, the report said.

The brokerage said that they estimate industry volumes to be up 1 per cent YoY as strong demand growth. It is set to be triggered in the eastern region and is expected to be offset by volume declines in the southern and central regions.

According to the report pointed this year the raw material cost is also likely to go up. By 7 per cent YoY, total costs per tonne are expected to be up led by price increase in pet coke, diesel, slag and packing material, among others.

Volume flow and prices are likely to remain muted, with the onset of monsoon, it said.

Owing to weak off-take in Tamil Nadu due to political matters and Uttar Pradesh, where sand mining issue continue to impact off-take. This will lead the cement volumes are likely to be down YoY in the southern and central regions, the report said.

Led by strong demand in Bihar, Jharkhand and Odisha and backed by increased government spending on road, housing and hospitals, in the eastern region by 20 per cent YoY volumes are likely to grow sharply, ICICI Securities said.

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