Concrete

Base effect hides monthly decline

Published

4 years ago

October 19, 2021

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Steel and cement sector witnessed a growth of 59.3 per cent and 7.9 per cent (YoY) respectively, which reflects the capex push provided by the Central and State governments. The decline in case of cement and steel production is mainly due to impact of the record surge in Covid-19 cases in May 2021 and the associated lockdowns on construction activity.

The Eight core sector should be read with caution again as the favourable base effect is again at play for the third consecutive month. In May 2021, core sector output rose by 16.8 per cent as against a contraction of 21.4 per cent in May 2020. On a month on month level comparison, there has been a marginal decline of 3.7 per cent which reflects the impact of the second wave of the Covid-19 pandemic and the associated lockdowns on business activities. One should note that May has been characterised by lockdowns of varied nature in both FY21 and FY22. The localised lockdowns during May??1 did have a bearing on output of the 8-core sector to some extent while the double-digit growth can be chiefly ascribed to the low growth number in May??020. There has been an upward revision in the core sector growth data for April??1 to 60.9 per cent (previous estimate: 56 per cent).

The double-digit Y-O-Y growth has been primarily driven strong growth registered in steel, natural gas and refinery products. Month-on-month improvement has been registered in case of fertilisers (ahead of kharif season), natural gas and coal production. The monthly index for May??1 is still 6.1 per cent lower than the pre-pandemic index of February??0 and 8.2 per cent lower than May??019 (the year prior to the pandemic). So far in FY22, the core sector output has witnessed a growth of 35.8 per cent compared with a de-growth of 29.4 per cent in the corresponding month last year but this purely a baseeffect phenomenon. There could be support from government capex as the fiscal numbers for this period show higher outlay on roads.

Key highlights

Coal production was higher by 6.9 per cent in May 2021 as against -14.1 per cent in May 2021. Despite the 2nd wave of the COVID19 pandemic disrupting business activities during the month, there has been a month-on-month improvement of 3.1 per cent in coal production on the back of revival in demand from the power sector.

Crude oil production fell by 6.3 per cent in May 2021, registering the 42nd consecutive monthly decline. The decline in production can be ascribed to adverse climatic conditions created by cyclone Tauktae, which hit the Indian west coast coupled with less than planned contribution from workover wells, drilling wells and old wells. The overall production has also been lower owing to lower consumer demand, infectivity issues in few wells, workovers and water knockouts.

Natural gas production rose by 20.1 per cent in May??021 compared with contraction of 16.7 per cent in May??020 mainly due to higher output from the PSC fields. However, production in government fields were low due to reduced gas production in Western Offshore due to cyclone Taukate, delay in commencement of gas production and less offtake by consumers due to Covid-19 issues. Natural gas production by Pvt/JVs companies in the PSC (production sharing contracts) regime has almost tripled on a YoY basis. This is due to increased contributions from D-34 field of KG DWN 98/3 and wells from satellite cluster.

Refinery production rose by 15.3 per cent in May??1 as against a de-growth of 21.3 per cent in May??020. There has however been a month-on-month decline of 4.6 per cent reflective of lower consumer demand amidst the localised lockdowns during the 2nd wave of the Covid-19 pandemic. Products that witnessed a rise in production were high speed diesel, petrol, liquefied petroleum gas, aviation turbine fuel and petcoke, while fuel oil and kerosene saw a fall in output during this month.

Fertiliser production declined to a 14-month low of 9.6 per cent in May 2021 compared with a high base of 7.5 per cent in May 2020. The m-o-m growth of 16.1 per cent can be ascribed fertilizer manufacturing companies increasing their production in May over April in anticipation of good demand ahead of the kharif sowing season. Along with this, the Centre increased the subsidy on fertilizers in mid-May after fertilizer producers announced their plans of increasing prices due to a surge in international feedstock prices. This hike in subsidies assuaged manufacturers??worries around a fall in demand from farmers. This is likely to have supported production too.

Steel and cement registered a growth of 59.3 per cent and 7.9 per cent (YoY) respectively which does reflect the capex push provided by the governments at both Centre and State level along with a low base effect. The m-o-m decline in case of cement and steel production highlights the impact of the record surge in Covid-19 cases in May 2021 and the associated lockdowns on construction activity. Labour shortages due to reverse migration also had a bearing on construction activities during May??021.

Electricity generation rose by 7.3 per cent in May 2021 as against a low base of 14.8 per cent in May 2020. However, there has been a month-on-month decline of 7.1 per cent as states imposed lockdowns to rein in the devastating effect of the second wave of the Covid-19 pandemic. The higher usage of electricity in residential locations during the summer season limited the monthly moderation to some extent.

CARE Ratings??View

There has been a dip in the core sector index for May??021 compared with the previous month which reflects the impact of the localised lockdowns on business activity. However, as economic activities, especially in the industrial segment were not significantly affected in June 2021, output of the core sector will witness an improvement. There has been a strong push for capex from the Government which will drive steel and cement while the advent of the kharif season will drive fertilizer production. The impact of the base-effect will continue in the next few months but will fade away subsequently. The IIP for the month of May??021 could range between 20-30 per cent though one should not read much into it.

Courtesy: CARE Ratings

ABOUT THE AUTHOR:

The article is authored by Sushant Hede, Associate Economist. He can be contacted on: Email: sushant.hede@careratings.com | Tel: 91-22-6837 4348

Disclaimer: This report is prepared by CARE Ratings Limited. CARE Ratings has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CARE Ratings is not responsible for any errors or omissions in analysis / inferences / views or for results obtained from the use of information contained in this report and especially states that CARE Ratings has no financial liability whatsoever to the user of this report.

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Concrete

Cement Margins to Erode as Energy Costs Rise: CRISIL

CRISIL warns of 150–200 bps margin decline this fiscal

Published

44 minutes ago

April 17, 2026

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Crisil Intelligence (CRISIL) released a report on April 13, 2026, indicating Indian cement manufacturers face margin erosion of 150–200 basis points this fiscal, reducing operating margins to between 16 per cent and 18 per cent. The firm noted that this represents a reversal from the prior year when margins expanded by 260–280 basis points. The analysis attributed the shift to rising input costs despite steady demand.

The report said that power and fuel, which typically account for about 26–28 per cent of production cost, are expected to increase by 10–12 per cent year on year, driven by higher prices for crude oil, petroleum coke and thermal coal. Brent crude was assessed as likely to trade between $82 and $87 per barrel, and industrial diesel prices rose by 25 per cent in March, raising logistics and procurement expenses. Such increases have therefore heightened cost pressures across the value chain.

Producers plan to raise selling prices by one–three per cent, which would put the average retail price of a cement bag at around Rs355–Rs360, according to the report. CRISIL’s director Sehul Bhatt was cited as saying that these hikes will at best offset a four–six per cent rise in production costs, leaving little room for higher profitability. The report added that intense competition and continual capacity additions constrain the extent to which firms can pass on costs.

Demand conditions remain supportive, with CRISIL projecting volume growth of six point five–seven point five per cent this fiscal on the back of accelerated infrastructure projects and steady industrial and commercial consumption. Nonetheless, the pace of recovery is sensitive to developments in West Asia, the speed of government infrastructure execution and monsoon performance. The agency noted that any further escalation in energy prices or delays in project execution would widen margin pressures.

Overall, the sector will continue to grow but with compressed margins as energy cost inflation outpaces the limited ability to raise prices. Investors and policymakers will therefore monitor both input cost trajectories and policy measures aimed at alleviating supply chain constraints.

Concrete

Haver & Boecker Niagara to showcase solutions at Hillhead

Focus on screening tech, diagnostics and quarrying efficiency

Published

44 minutes ago

April 17, 2026

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Haver & Boecker Niagara will showcase its mineral processing technologies at Hillhead 2026, scheduled from June 23–25 in Buxton, UK.

At Stand PA3, the company will present its end-to-end solutions including screeners, screen media and advanced diagnostics, with a focus on improving efficiency, uptime and throughput for aggregates producers.

Highlighting its screen media portfolio, the company will feature Ty-Wire media with hybrid design offering up to 80 per cent more open area, alongside FLEX-MAT® solutions designed to enhance wear life and throughput while reducing blinding and clogging.

The showcase will also include its PULSE Diagnostics suite, comprising vibration analysis, condition monitoring and impact testing, aimed at assessing equipment health and preventing unplanned downtime.

Commenting on the event, Martin Loughran, Sales Manager, UK & Ireland, said, “Hillhead presents an excellent opportunity for us to demonstrate how we deliver innovative technologies along with long-term service and technical support.”

The company will also highlight its Niagara F-Class vibrating screen, designed to reduce structural vibration and improve operational reliability under demanding conditions.

The participation reflects Haver & Boecker Niagara’s focus on supporting quarrying operations with advanced screening solutions and predictive maintenance technologies.

Concrete

Siyaram Recycling Secures Rs 21.03 mn Order From Anurag Impex

Domestic Fixed Cost Contract To Be Executed Within Seven Days

Published

2 days ago

April 15, 2026

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Siyaram Recycling Industries Limited (Siyaram Recycling) has informed the stock exchange that it has secured a purchase order for brass scrap honey from Anurag Impex. The company submitted the intimation on 10 April 2026 from Jamnagar and requested the filing be taken on record. The filing was made under the provisions of regulation 30 of the SEBI listing regulations and accompanying circular. The intimation referenced the SEBI circular dated 13 July 2023 and included an annexure detailing the terms.

The order carries a fixed cost value of Rs 21.03 million (mn) and is to be executed domestically within seven days. The contract was described as a fixed cost engagement and the customer was identified as Anurag Impex. The announcement specified that the order size contributes a short term consideration to the company. Owing to the brief execution window, logistics and dispatch were expected to be prioritised.

The filing clarified that neither the promoter group nor group companies have any interest in the purchaser and that the transaction does not constitute a related party transaction. Details were provided in an annexure and the document was signed by the managing director, Bhavesh Ramgopal Maheshwari. The company referenced compliance with SEBI disclosure requirements in its notification. The notice indicated that no related party approvals were required owing to the nature of the transaction.

The order is expected to provide a modest near term revenue inflow and to be processed within the stated execution window given the nature of the product and the fixed cost terms. Management indicated the contract will be executed in accordance with standard operational procedures and accounting recognition at completion. The development signals continuing demand in the secondary metals market for brass scrap.