Huge stocks dampen cement price
hike move
The Economic Times — December
17, 2001
Desperate attempts by cement makers to push up prices in Mumbai,
the largest market for the commodity, have not quite succeeded.
The latest move by all top manufacturers to hike prices last
week — by Rs 7 a bag — is learnt to have fallen
flat, with manufacturers driving up dispatches to gain the
maximum from the post-monsoon pick-up in demand.
Dealers say that the wholesale prices in the trade segment,
which had risen by Rs 5 to Rs 161 per bag earlier this week,
have again inched back to the earlier levels.
Retail prices per bag, as a result, are currently ruling
at around Rs 170. Prices in the non-trade (bulk) segment are
ruling at just around Rs 140 per bag.
“There is a downward trend in prices as supplies have
shot up in recent weeks. Delays in regulating supplies is
having a dampening effect,” said a dealer.
“It’s a situation where every manufacturer wants
to benefit from the improvement in demand. While efforts are
on to push up prices, manufacturers do not want to lose out
on volumes either,” said an analyst.
Says an industry observer, "The demand situation is
today much better with fresh orders coming from infrastructure
projects.
"However, this is not translating into improved prices
as the spurt in supplies have been far exceeding the additional
demand.”
The weakening of prices in Mumbai would come as a setback
for manufacturers who were planning to step up the momentum
to jack up prices — by around Rs 15-20 per bag —
over the coming weeks.
Manufacturers, however, say that the weakening is a temporary
phase and will get corrected in the coming weeks.
“After all, the demand situation has improved and we
are looking at other arrangements, including supply regulation,
to ensure that the prices stay at that level,” said an
industry official.
“Traditionally, this is the peak season for the industry.
Demand has improved and construction activities are going
on in full swing. We expect the demand to improve in the coming
weeks,” said an industry official.
Last month, industry shipments rose by 7.4 per cent to 8.3m
tonnes, up from 7.7m tonnes in the same period last year,
while production rose by 7.5 per cent.
Cement dispatches during April-November '01 increased to
66m tonnes, against 62.4m tonnes the previous year, while
industry output increased from 62.6m tonnes to 66.1m tonnes
during the period.
|
