Cement companies could not sustain the hike in prices that they effected in January and February because of weak demand, analysts said.
According to a report by Religare Institutional Research, while January and February witnessed sharp hikes, a cool-off is evident in March as manufacturers reeled under the dual pressure of feeble demand and a poor macroeconomic scenario.
The all-India average price has been nearly flat month on month in March. Only in fiscal 2002 – when India’s GDP dipped below 4 percent – did prices witness such pressure, leading to a price decline in March (over February), the report shows.
Prices have remained stable over the last fortnight in Gujarat, after correcting Rs 10-30 per 50-kg bag in the first fortnight of February. The market, however may remain weak in April and dealers anticipate some moderation in cement prices from current levels.
Demand is likely to be tepid in Maharashtra because of the prevailing shortage in sand and water. Prices in Mumbai remained stable despite weak demand; however, Pune saw a correction last week after staying stable during the past fortnight.
Despite several attempts by manufacturers to increase prices, it hovered at Rs 275-280 per bag in Delhi.