Cement stocks strengthen on expectations of further hike in prices

As per reports, cement prices are seen hardening as demand from state projects picks up and rural housing drives volume growth. Rising infrastructure projects and the 2010 Commonwealth Games are driving prices higher, according to reports. Reports citing analysts and company officials indicated that cement prices across India are expected to rise following a spate of price hikes already effected by cement makers in southern and western India. Late last month, cement prices were hiked by Rs 5-10 for a 50 kg bag in western and southern part of India. On 2 December 2009, the cement prices were increased by Rs 8-11 per bag in the Mumbai region. The cement industry is growing at 7-8% and has capacity of 240 million tonnes, which will be around 285 million tonnes by the year ended March 2011, the second fastest after China, according to Cement Manufacturers' Association (CMA) members. Earlier there was a fear of surplus capacity but now the market has understood that it is not much and is getting absorbed. India's largest cement producer by capacity ACC's cement shipments fell 4.04% to 1.66 million tonnes in November 2009 from 1.73 tonnes in November 2008. Aditya Birla Group's cement shipments rose 15.3% to 2.93 million tonnes in November 2009 over November 2008. Aditya Birla Group last month said it was combining its cement operations under group firm UltraTech Cement to make India's largest cement firm.