Cement prices at 5-year low though no significant price hike likely in the near term: Report - World News Network

New Delhi [India], December 3 (ANI): Cement prices have fallen to a five-year low due to intense competition in the sector, according to a report by Yes Securities.
The report noted that despite attempts to raise prices in recent quarters, these hikes were rolled back due to subdued demand, reflecting weak market dynamics.
It said, “The backdrop of intense competition has led to weak pricing, and cement prices have currently dropped to a five-year low….. In the near term, we don’t expect any significant price hike; we rather foresee stable pricing till the advent of normalization”.
The report also noted that the intense competition among cement manufacturers has resulted in pricing pressures, leaving the industry unable to sustain price increases.
The report noted that the situation is expected to persist in the near term, with no significant price hikes anticipated until demand improves.
It also highlighted several long-term themes that could shape the sector in the coming years. Recovery in demand is likely from mid-FY26, driven by increased infrastructure projects, revival in rural and urban housing demand, and a surge in real estate activity. These developments are expected to gradually balance the demand-supply dynamics.
The report expects sluggish demand in FY25, with the industry likely experiencing flat to negative year-on-year volume growth. However, a gradual improvement in capacity utilization is anticipated, narrowing the demand-supply gap.
The industry is projected to add approximately 90 million tonnes of cement capacity through organic growth between FY25 and FY30. By FY27 and FY28, the installed capacity is expected to reach 703 million tonnes and 723 million tonnes, respectively.
“We can expect a demand revival from the mid of FY26E backed by factors like, pick up in infrastructure projects, Revival in rural & urban housing demand, and a real-estate project spree backed by a gradual normalization of the “Demand & Supply” dynamic,” said the report.
Beyond this period, the pace of capacity addition is expected to slow, ensuring that the market does not face oversupply issues.
The report also emphasized the importance of cost deflation initiatives and industry consolidation in improving price discipline over time.
In the near term, the sector is expected to maintain stable pricing as it works towards demand-supply normalization. While the current situation poses challenges, the long-term outlook remains optimistic with expected improvements in market conditions and pricing trends starting from FY26. (ANI)

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