Cement stocks are trading in the green led by Madras Cements and Ambuja Cement. Cement sales and production figures for March 2012 showed positive signs. As per the Cement Manufacturers' Association, cement sales figures stood at almost 18 million tonnes (MT), which is higher by 6% YoY as compared to the sales figure of about 16.9 MT during the same month last year. At the same time, production increased by 5% YoY to 17.9 MT. The corresponding last year's figure stood at about 17 MT. With the financial year coming to an end, the same figures of FY12 have come out as well. As compared to the figures of FY11, sales and production figures were up 7% YoY (to 179 MT; 168 MT in F11) and 6% YoY (180 MT; 169 MT in FY11). It must be noted that these figures do not include numbers of cement majors such as the Holcim Group companies, ACC and Ambuja Cement since they are not part of the Association.
The demand for cement saw a sharp rise in the past quarter on account of the government reviving invest towards infrastructure development. The scenario was not so great during the first half of the year on the back of poor demand from infrastructure and real estate companies. In addition, high borrowing costs and the overall slowdown did not help matter either. Cement prices have even firmed up in recent times on account of stronger demand. Companies have been able to pass on the rise in input costs as well, which is a positive sign as it allows them to maintain their operating margins.
Steel stocks are trading strong led by JSW Ispat and JSW Steel. According to a leading financial daily, a consortium led by Steel Authority of India Limited (SAIL) is planning to bid for copper and gold reserves in mineral-rich Afghanistan. Another consortium again led by SAIL has already been selected by the government of the war-torn country to develop its rich Hajigak iron ore mines and are likely to ink a final pact in May to develop Hajigak iron ore mines and set up steel and power plants there. The consortium that also includes state-owned National Mineral Development Corporation (NMDC) and RINL and private sector steel players JSW Steel, JSW Ispat, Jindal Steel and Power, and Monnet Steel and Power has already won the mining rights for three blocks at Hajigak in November 2011.