Cement prices are increased by 12% in April

Rising input costs, including changing imported coal prices and crude, and expectations of rising demand saw cement producers hike prices in April by ₹45-50 per bag, a 12 per cent month-­on­-month hike. Region ­wise, in the North Indian markets the rise was over ₹50/bag (14% m-­o-­m) at ₹431/bag.

The south Indian markets saw an 8–10% rise in price at about ₹30/bag. Prices are around ₹392-400/bag (over March price of ₹362–370/bag). In the west region, cement prices were up ₹45­-50/ bag, (approximately 12%) m-o­-m, to ₹423/bag. The eastern region saw a price hike of 13­-14% m-­o­-m, at ₹384 per bag.

According to a cement major, rise in input costs has led to an hike in cost of production by at least ₹60-70/ bag. The average imported coal price has remained volatile, as in the last few days it has again increased above $300/tonne (6,000 kcal). Cement demand is expected to increase 10–12% in FY23.

“Cement price increase in April is done to counter fuel inflation, but based on spot imported coal prices, we understand cement companies need other increase of 3­5% to keep Dec­ 21 quarter EBITDA margins,” the report said. Analysts say the effect of rise in coal and pet coke prices will have a delay effect and will start reflecting in the following quarters.

ACC, one of the major cement producer in India, which declared results for the January ­-March quarter, saw the input cost pressure take a toll on its EBITDA margin. Margin decreased over 600 basis points y­ear-o­n-year. The EBITDA margin was at 14.3% (lower than 20% ). Its combined EBITDA was down 24% year-­on-­year.

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