According to media reports, cement prices, which ruled strong till July, have now begun receding. In fact, the drop in prices is rather delayed perhaps due to the poor monsoon, which did not halt construction activity in the months beginning June. Dealer reports suggest a 6-8 per cent drop last month, with the southern region being the only exception.Along with the with price, demand has also slackened. The eastern region seems worst-hit, registering a 10 per cent drop in price, with Delhi and other northern areas seeing a similar pullback.A report by Brics Securities, which points out that there will be excess supply till fiscal 2015, says the sudden dip in price is because of an excessive raise in July by producers, when they knew rainfall will not be too severe. In spite of poor demand and price contraction, cement stocks are ruling strong.Perhaps the stellar and better-than-expected jump in the June quarter’s average realisation (about 12 per cent for the five top firms versus the expected 4-5 per cent) has helped investor confidence. ACC and UltraTech Cement posted the strongest jump in realisation.Another positive for the industry, which is reeling from oversupply, is that the pace of capacity additions has petered out. Industry sources estimate surplus capacity till end-2014 and this is already factored into valuations.