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Cement prices continue to slide - Views on News from Equitymaster
 
 
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  • Jun 20, 2000

    Cement prices continue to slide

    That cement prices have been adversely affected by the recent drought in four states is well known. However the extent to which the weakness in prices has percolated comes as a surprise.

    A not so popular place to check out the price trend in the cement sector is the weekly inflation report of the reserve Bank of India (RBI), which forms a part of the Weekly Statistical Supplement (WSS). According to the WSS, the ‘cement, lime and plaster’ prices (whole sale) declined 3.7% YoY. Over the last month the month the decline has been put at 0.9% and over the week at 0.2%. Surely, the fortunes of the cement sector seem to have taken a complete turn because of the deficient rainfall in certain states.

    Again the WSS seems to have been indicating a weakness much before others noticed it. The WSS dated 12th February showed that on a YoY basis this category had recorded a decline of 7.8%.

    In a recent interview with Equitymaster.com, Y M Deosthalee, Senior Vice President Finance, stated that “Prices have dropped in almost all the markets except in the East”. He went on to add that cement volumes however had not witnessed a decline. The cement companies’ honeymoon with rising prices and increasing demand seems to have come to an end rather abruptly. But, in view of the announcement of a normal monsoon, the demand may pick up sooner than anticipated.

     

     

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