Economy & Market

Prices fall, outlook not too optimistic

Published

7 years ago

January 1, 2019

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The steep demand growth in the first half FY19 has increased optimism in the industry earlier, which seems to be tapering after the latest round of fall in prices.

Cement prices, which rose by about 6 per cent over September and October 2018, have seen a downward trend again in December, close on the heels of remaining neutral in November 2018. After remaining neutral at 2054.7 pints in November at the lifetime peak, ET Cement Index that tracks cement price movements in different regions, has witnessed a fall of 2.61 per cent to 2001.05 in December 2018. The industry veterans exuded hope in November that the high growth trend witnessed in cement demand in the first half of FY19 would continue in the second half, imparting the much needed pricing power to the industry. But somehow that is not to be. In the first half of FY 2019, the demand growth was at around 13 per cent, unheard of since 2010.

The cement industry, which remained subdued for four years, picked up pace in the third quarter of FY19, driven largely by government initiatives such as Bharatmala, Housing for All, Swacch Bharat Abhiyaan, Sagarmala and metro construction, according to Cement Manufacturers Association (CMA). The focus on infrastructure has pushed up volume growth of the cement sector from 4 per cent to 12 per cent between September 2017 and September 2018.

Though some cement majors with pan-India presence are said to be pushing volumes to meet year-end targets, rising cost of inputs have continued to put pressure on the industry bottom lines, leading to certain stock market players downgrading the cement sector.

In a recent report, leading brokerage Morgan Stanley has downgraded the sector, stating that upside for cement prices is capped in the second half of FY19 (2018-19) mainly due to demand risk in the real estate segment because of potential funding challenges.

While raising the sectors FY19 demand growth estimate to 9 per cent from 7.5 per cent earlier, Morgan Stanley hints at a downside risk in the urban/semi-urban real estate segment, but felt that the infrastructure-led demand should be sustained. It also sees a potential demand moderation in second half of FY 2019. It expects the industrys capacity utilisation to rise a modest 1 per cent YoY in FY20 to 79 per cent (for the companies it covered).

Mahendra Singhi, president of the CMA, exuded hope that the cement demand will grow about 8 per cent in FY19 and that he was positive on the long term (five-year) outlook for growth of the industry.

Taking cue from the general optimistic trend in demand growth in the first half of FY19, many cement manufacturers have announced expansion plans in the last two months. Singhi expects that around 20-25 million tonnes (MT) of fresh capacity to be added in FY19 and FY20 each.

With the average capacity utilisation of the industry still low at 70 per cent, expansion of capacities without commensurate growth in demand could impact the pricing power of the industry in the medium term.

Prices fell for the fifth month in a row in the south. On an average, cement prices declined by Rs 5 per bag this month in the region, continuing the decline that started in August, a dealer said. Demand remained lukewarm in northern, central and western India regions too with producers from south pushing their products to other regions.

In the northern region, there is another reason for slowdown – most of the construction workers move back to their villages in December for harvesting seasonal crops. However, there is an expectation that the cement prices will inch up in the region from January 2019, when the construction workers return and activity resumes.

The only event that could change the trend towards positive for the industry is reduction of Goods and Services Tax (GST) from 28 per cent to 18 per cent, which the industry has been demanding for quite sometime.

However, the demand did not materialise in GST rate reductions on several goods announced in December 2018, that have come into effect from January 1, 2019. Cement being one of the top tax grosser for the government, including the state governments, they are said to be against the move.

Analysing the impact of reduction in GST on cement as expected by the industry, Vaibhav Agarwal of PhilipCapital said that it will be a overall positive for the industrys growth and pricing power. Cost of construction will come down resulting in more affordable real estate prices, leading to improved demand for real estate and housing?segment, albeit in the long term.

It will also provide some breather to the industry by increasing their pricing power, so that they can cover the rising logistics and input costs, in the medium term. And even it may improve transparency in the distribution channels, imparting some stability to prices, Agrawal feels.

But by when the reduction in GST for cement will happen, still remains a million dollar question

– B.S. SRINIVASALU REDDY

Economy & Market

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

Published

3 days 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

2 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

2 weeks ago

April 13, 2026

admin

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.