Weak demand continues to ail the cement sector. The trend is quite contrary to the normal, where demand moves up after the monsoon, as construction activity, deferred during the rains, picks up. This time, though, cement prices have declined across most parts of the country, except in Andhra Pradesh and Telangana. In these two states, government activity in infrastructure projects has helped shore up prices. The steepest price decline in the three months ended 31 December has been in the north, where prices are down by about Rs.15-20 per bag. One reason is the surplus capacity built up in the recent past in Rajasthan. Prices have been dropping in the eastern and central regions too, although the fall is less severe. This has also pulled down all-India average cement prices by 2-5 per cent per bag. According to Reliance Securities Ltd, the absence of strong infrastructure activity and housing demand are the main reasons for the woes of the cement sector.
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