In Andhra Pradesh, cement prices have started to increase. After hitting a low of nearly Rs 200 a 50-kg bag in the retail market at the end of 2012, prices have now touched Rs 220-230 in the state.

Anjani Portland Cement CEO SVS Shetty said that the perceptible increase in demand is behind the price rise. It is expected that both demand and price to be on higher levels going forward, Shetty said. Government demand, too, has picked up with agencies such as State housing corporations releasing orders in the last couple of weeks, he added.

Cement demand in the South is mostly up due to increase in construction, mainly in the housing sector, and general elections next year are also expected to boost demand, according to a functionary of Sagar Cement. Construction activity has picked up slightly after the Sankranthi festival.

With the best season for construction ahead, the cement industry is hopeful of both surge in production and hardening of prices, say industry sources. Subdued demand, sluggish realty market in Hyderabad and entry of several big players with high capacity, along with virtually no Government projects coming, kept prices low for several months last year.

The worst phase turned out to be December, when prices crashed by nearly Rs 50-60 a bag. High power tariffs, power cuts and costlier diesel are also weighing on the industry to push up the prices. The coming months portend a steady price rise, industry experts felt.