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Cement prices are racing north. In the past few weeks, prices have gone up by about Rs 15 a bag (of 50 kg) in key markets across the country.
The industry experts blame the increase in inputs costs, including power and fuel, for the price hike.
A bag of cement now sells between Rs 300 and Rs 340 in Mumbai, Chennai and Hyderabad, according to industry sources.
Power shortage
Mr R. C. Sodani, Director and Chief Executive Officer, JSW Cement Ltd, said prices have gone up in almost all markets. “We have also increased price by about Rs 15 a bag,” he told Business Line on Friday.
According to a senior executive of ACC Ltd, the increase was steeper in the southern markets than in the North. “Due to non-availability of power, especially in Andhra Pradesh and Tamil Nadu, cement manufacturers are importing coal resulting in higher cost of production,” he said. There has been no big change shift in the demand scenario across the country, he added.
In Andhra Pradesh, new cement plants have to pay more for power.
Breaking the 300-level
Cement prices in the State The price is range from Rs 300/bag in Hyderabad to Rs 320 in the Rayalseema districts of Kadapa and Ananthapur.
The increase has been quite sharp as just about a month ago, the same bag would have been available for Rs 275-280 in Hyderabad. On the demand side, there has been a marginal increase due to pre-monsoon buying.
The average fuel cost for a tonne of clinker production during the last quarter was at Rs 1,071 compared to Rs 801 in the comparable quarter last year, according to data from Sagar Cements Ltd.
Similarly, the total freight cost for a tonne of cement increased to Rs 689, from Rs 566, on account of higher diesel prices.
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