Financial Daily from THE HINDU group of publications
Tuesday, Jul 06, 2004
Industry & Economy
Rise in cement prices in AP
Ch Prashanth Reddy
Hyderabad , July 5
CEMENT prices in Andhra Pradesh have shot up by Rs 10 to Rs 15 per bag on Monday. As against a price of around Rs 135 per bag last month, the current prices are ruling at Rs 145 to Rs 150 per bag.
According to the President of All-India Mini Cement Manufacturers Association, Mr Ramesh Chandra, the prices were restored to the level of what were prevailing during April-May, this year.
The prices have declined last month as the manufacturers released more stocks into the market anticipating that the demand would decline following the onset of monsoons.
However, the demand for cement increased in June and consumption of cement had gone up to 10 lakh tonnes last month as against despatches of 9 lakh tonnes.
Thus, the inventories of the cement companies have also declined.
Following this, the prices were restored to the April-May level.
"The rise in cement prices is imminent as, for the survival of the industry, the price has to be at least Rs 150 per bag," Mr Ramesh Chandra told Business Line.
He said that the industry was expecting a rise in the demand for cement this year.
As against a sale of 10.7 million tonnes in the State last year, the sales were estimated to be in the range of 12 million tonnes in the current year.
The capacity utilisation of the cement units was also estimated to go up from 71 per cent last year to 81 per cent this year.
The cement units in the State have a combined installed capacity of about 25 million tonnes per annum.
Mr Ramesh Chandra said that the demand-supply gap had narrowed in many northern States at present.
Consequently, these States have to import cement from other States if there was any further rise in the demand.
This would give scope for AP cement units, which have a surplus capacity, to enhance their exports to the other States.
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