India's demand for cement is expected to rise to 6 per cent in the current financial year against 4.6 per cent in 2015-16, ratings agency ICRA has said.
This is expected to support cement prices in the near term. However, the energy cost benefits are expected to reverse in second half of 2016-17, given the recent hike in the pet coke and coal prices, ICRA said in a statement.
ICRA Ratings Senior VP Sabyasachi Majumdar said demand in 2016-17 is likely to be mainly driven by the pick-up in the infrastructure segment, primarily road projects and housing segment and the likelihood of a recovery in the rural demand from second half of this fiscal, given the better monsoons.
“This is likely to support cement prices in near term. Notwithstanding the improved sentiments in these sectors, a number of structural constraints need to be sorted out for project implementation to gather pace in the other infra sub segments,” he added.