Economy & Market

Prices ease slightly, save high margins for manufacturers

Published

7 years ago

January 9, 2019

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Cement prices remain at higher levels even in weak season, even as demand growth is expected to moderate to single digit this fiscal from double digit growth posted last fiscal.

Cement prices have eased slightly in August 2019 after remaining flat in July 2019. However, at current prices the cement manufacturers are expected to post higher profits in the quarter ending September 2019, on the back of rising trend in prices for four months since March 2019 and lowering cost, mainly of fuels.

Meanwhile, experts are pegging the demand growth during the current fiscal at 7 per cent, much below 13 per cent recorded last year. While normal monsoon is heralding good times for agriculture activity, intensive floods witnessed in some major states could have played havoc with farm outcomes.

The ET Cement Index that tracks countrywide cement price movements was down by 1.36 per cent to 2364.7 by end-August 2019 from 2397.3 points at the beginning of the month, after being flat in July. Mid-way through the monsoon season, the cement manufacturers are unlikely to raise prices. So, one has to wait till third quarter (October-December) before the demand and supply play comes into action. Even the fears of economy slowing down are also haunting the sentiment.

Tempered growth
Rating agency ICRA has pegged the cement demand growth for the current fiscal at 7 per cent compared to 13 per cent growth witnessed in FY2019, while citing "relatively weak offtake seen in Q1 (April-June) FY2020 (2019-20)". However, ICRA notes: Although this is likely to affect cement manufacturers, they are likely to benefit from the fact that average prices for FY2020 (2019-20) are likely to be better than FY2019 while costs are likely to be lower. This is likely to support near term profitability for cement mills.

Sabyasachi Majumdar, Senior Vice President & Group Head – Corporate Ratings, ICRA says, "We expect cement demand growth to taper off in FY2020 after a strong double-digit growth in the previous year. This is already being reflected in tepid growth in Q1 FY2020, on the back of slowing of the project execution on account of general elections (usually resulting in labour unavailability)."

Steep rise in prices in April and May 2019 have weakened the demand, curtailing the pricing power of the industry in the following months. In June, ET Cement Index eased 1.39 per cent at 2397.3 from the all time peak of 2431.1 points registered at the end of May 2019. With a sharp 8 per cent Month-on-Month (MoM or compared to the previous month) hike pan-India in April, average trade prices in April-June were up by 11 per cent Quarter-on-Quarter (QoQ).

The demand was impacted owing to the slowdown in the Government projects, ahead of the elections and shortage of labour, said ICRA in its note. The same is expected to pick up from Q3 FY2020, post the monsoon season. In April 2019, cement production at 29.2 million tonnes (MT) was lower by 12 per cent on M-o-M basis. Further, in May and June 2019, it declined by 2.1 per cent to 28.6 MT and by 0.6 per cent to 28.4 MT respectively.

However, ICRA expects the demand to pick up in Q3 FY2020 with the growth likely to be driven by housing, primarily rural housing and affordable housing, and improved focus on infrastructure segments, mainly road, railway and irrigation projects.

"The easing of the cost side pressures owing to decline in the input costs such as coal and pet coke prices by 13.5 per cent year-on-year (Y-o-Y) and by 11 per cent Y-o-Y respectively in April-July 2019 would result in lower power and fuel expenses during Q2 FY2020. The cement companies’ profitability is likely to increase in Q2 FY2020 on the back of higher prices and lower input costs," Majumdar says.

On the capacity side, ICRA expects around 18-20 million tonnes per annum (MTPA) to get added in FY2020. Most of these new supplies are not fully integrated and are largely backed by old limestone mining leases. Also, the grinding capacity addition is higher in relation to the clinker capacity, thus, the actual production from new capacities is likely to be lower. While the incremental demand of around 24 million MT is greater than the incremental supply, the capacity overhang is likely to keep the utilisation at moderate levels – 71 per cent in FY2020, despite some increase from 69 per cent in FY2019.

Normal monsoon
For the first 3 months during this monsoon period (from 1 June 2019 to 28 August 2019), the South-West monsoon has been normal, according to Indian Meteorological Department (IMD) data. However, there has been a marginal moderation in the deviation from the normal for this cumulative period compared with a week ago. "During the previous 5 years, monsoon remained normal during this same period, but this is the first time (in the last 5 years) when the deviation from normal has been positive," says Madan Sabnavis, Chief Economist, CARE Ratings, in its Monsoon Monitor released on August 30, 2019.

There are still seven subdivisions of the 36 subdivisions in the country, which have recorded deficient rainfall. There have been equal numbers of sub-divisions (seven) which have recorded both excess and deficient rainfall, with the remaining 22 subdivisions receiving normal rainfall. "The concern revolves around these subdivisions as both excess rainfall or deficient rainfall could adversely impede sowing and cropping patterns," CARE Ratings said.

Several states witnessed large scale floods, viz. Gujarat, Rajasthan, Maharashtra, Karnataka and Kerala. The western and south-west regions of the country have received heavy rains and have been clubbed under the category of "excess rainfall". If the monsoon is normal and well-spread out in all regions, then it has the potential to increase agriculture incomes in rural areas and could impact the overall economic growth. The sowing patterns across key crops as of 23 August, 2019 has seen an improvement but the concern remains around the sowing of rice which has seen a contraction of around (-) 20 lakh hectares from normal and a year ago.

– BS SRINIVASALU REDDY

Economy & Market

TSR Will Define Which Cement Companies Win India’s Net-Zero Race

Published

1 week ago

April 27, 2026

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Jignesh Kundaria, Director and CEO, Fornnax Technology

India is simultaneously grappling with two crises: a mounting waste emergency and an urgent need to decarbonise its most carbon-intensive industries. The cement sector, the second-largest in the world and the backbone of the nation’s infrastructure ambitions, sits at the centre of both. It consumes enormous quantities of fossil fuel, and it has the technical capacity to consume something else entirely: the waste our cities cannot get rid of.

According to CPCB and NITI Aayog projections, India generates approximately 62.4 million tonnes of municipal solid waste annually, with that figure expected to reach 165 million tonnes by 2030. Much of this waste is energy-rich and non-recyclable. At the same time, cement kilns operate at material temperatures of approximately 1,450 degrees Celsius, with gas temperatures reaching 2,000 degrees. This high-temperature environment is ideal for co-processing, ensuring the complete thermal destruction of organic compounds without generating toxic residues. The physics are in our favour. The infrastructure is not.

Pre-processing is not the support act for co-processing. It is the main event. Get the particle size wrong, get the moisture wrong, get the calorific value wrong and your kiln thermal stability will suffer the consequences.

The Regulatory Push Is Real

The Solid Waste Management (SWM) Rules 2026 mandate that cement plants progressively replace solid fossil fuels with Refuse-Derived Fuel (RDF), starting at a 5 per cent baseline and scaling to 15 per cent within six years. NITI Aayog’s 2026 Roadmap for Cement Sector Decarbonisation targets 20 to 25 per cent Thermal Substitution Rate (TSR) by 2030. Beyond compliance, every tonne of coal replaced by RDF generates measurable carbon reductions which is monetisable under India’s emerging Carbon Credit Trading Scheme (CCTS). TSR is no longer a sustainability metric. It is a financial lever.

Yet our own field assessments across multiple Indian cement plants reveal a sobering reality: the primary barrier to scaling AFR adoption is not waste availability. It is the fragmented and under-engineered pre-processing ecosystem that sits between the waste and the kiln.

Why Indian Waste Is a Different Engineering Problem

Indian municipal solid waste is not the material that imported shredding equipment was designed for. Our waste streams frequently exceed 40 per cent to 50 per cent moisture content, particularly during monsoon cycles, saturated with abrasive inerts including sand, glass, and stone. Plants relying on imported OEM equipment face months of downtime awaiting proprietary spare parts. Machines built for segregated, low-moisture waste fail quickly and disrupt the entire pre-processing operation in Indian conditions.

The two most common failures we observe are what I call the biting teeth problem and the chewing teeth problem. Plants relying solely on a primary shredder reduce bulk waste to large fractions, but the output remains too coarse for stable kiln combustion. Others attempt to use a secondary shredder as a standalone unit without a primary stage to pre-size the feed, leading to catastrophic mechanical failure. When both stages are present but mismatched in throughput capacity, the system becomes a bottleneck. Achieving the 40 to 70 tonnes per hour required for meaningful coal displacement demands a precisely coordinated two-stage process.

Engineering a Made-in-India Answer

At Fornnax, our response to these challenges is grounded in one principle: Indian waste demands Indian engineering. Our systems are built around feedstock homogeneity, the holy grail of kiln stability. Consistent particle size and predictable calorific value are the foundation of stable kiln combustion. Without them, no TSR target is achievable at scale.

Our SR-MAX2500 Dual Shaft Primary Shredder (Hydraulic Drive) processes raw, baled, or loosely mixed MSW, C&I waste, bulky waste, and plastics, reducing them to approximately 150 mm fractions at throughputs of up to 40 tonnes per hour. The R-MAX 3300 Single Shaft Secondary Shredder (Hydraulic Drive), introduced in 2025, takes that primary output and produces RDF fractions in the 30 to 80 mm range at up to 30 tonnes per hour, specifically optimised for consistent kiln feeding. We have also introduced electric drive configurations under the SR-100 HD series, with capacities between 5 and 40 tonnes per hour, already operational at a leading Indian waste-processing facility.

Looking ahead, Fornnax is expanding its portfolio with the upcoming SR-MAX3600 Hydraulic Drive primary shredder at up to 70 tonnes per hour and the R-MAX2100 Hydraulic drive secondary shredder at up to 20 tonnes per hour, designed specifically for the large-scale throughput that higher TSR ambitions require.

The Investment Case Is Now

The 2070 Net-Zero target is not a distant goal for India’s cement sector. It starts today, with decisions being made on the plant floor.

The SWM Rules 2026 are already in effect, requiring cement plants to replace coal with RDF. Carbon credit markets are opening up, and coal prices are not going to get cheaper. Every tonne of coal a cement plant replaces with waste-derived fuel saves money on one side and generates carbon credit revenue on the other. Pre-processing infrastructure is no longer just a compliance requirement. It is a business investment with a measurable return.

The good news is that nothing is missing. The technology works. The waste is available in every Indian city. The government has provided the policy direction. The only thing standing between where the industry is today and where it needs to be is the commitment to build the right infrastructure.

The cement companies that move now will not just meet the regulations. They will be ahead of every competitor that waits.

About The Author

Jignesh Kundaria is the Director and CEO of Fornnax Technology. Over an experience spanning more than two decades in the recycling industry, he has established himself as one of India’s foremost voices on waste-to-fuel technology and alternative fuel infrastructure.

Concrete

WCA Welcomes SiloConnect as associate corporate member

Published

3 weeks ago

April 13, 2026

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The World Cement Association (WCA) has announced SiloConnect as its newest associate corporate member, expanding its network of technology providers supporting digitalisation in the cement industry. SiloConnect offers smart sensor technology that provides real-time visibility of cement inventory levels at customer silos, enabling producers to monitor stock remotely and plan deliveries more efficiently. The solution helps companies move from reactive to proactive logistics, improving delivery planning, operational efficiency and safety by reducing manual inspections. The technology is already used by major cement producers such as Holcim, Cemex and Heidelberg Materials and is deployed across more than 30 countries worldwide.

Concrete

TotalEnergies and Holcim Launch Floating Solar Plant in Belgium

Published

3 weeks ago

April 13, 2026

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TotalEnergies and Holcim have commissioned a floating solar power plant in Obourg, Belgium, built on a rehabilitated former chalk quarry that has been converted into a lake. The project has a generation capacity of 31 MW and produces around 30 GWh of renewable electricity annually, which will be used to power Holcim’s nearby industrial operations. The project is currently the largest floating solar installation in Europe dedicated entirely to industrial self-consumption. To ensure minimal impact on the surrounding landscape, more than 700 metres of horizontal directional drilling were used to connect the solar installation to the electrical substation. The project reflects ongoing collaboration between the two companies to support industrial decarbonisation through renewable energy solutions and innovative infrastructure development.