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Friday, December 11, 2009

Cement prices to rise in Jan on realty rebound

The cement prices are seen hardening in the Jan-March quarter as demand from state projects picks up and rural housing drives volume growth, industry officials said.

Analysts and company officials expect prices across India to rise following a spate of price hikes already effected by cement makers in southern and western India.

Prices went up by 8-10 rupees for a 50 kg bag southern India late November to 155-175 rupees, while a similar hike in Mumbai on Dec. 2 raised prices to 240-245 rupees per bag.

"We expect it to go up 5-10 rupees further in the next few months as construction activity picks up," said Rupesh Sankhe, analyst with Angel Broking, talking about the southern and western markets.

"Producers are able to recover a higher price as demand in the region is growing at 12 percent now," said N.Srinivasan, managing director, India Cements Ltd, a Chennai-based cement producer.

"Earlier there was a fear of surplus capacity but now the market has understood that it is not much and is getting absorbed," he said.

Binani Cement Ltd, which operates in the northern market, sees capex plans in infrastructure projects and the 2010 Commonwealth Games driving prices higher.

"Prices from January onwards in the northern region will be firming up by 5-10 rupees per bag," said Vinod Juneja, managing director, Binani Cement said

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