While the demand has started to gradually pick up, the shortage in labour has hit the volumes and pricing in the cement sector. This factor will continue to control the sector, stated a report. Due to easing of lockdown, the transport situation has improved. However, rail transportation is still plagued by labour scarcity at unloading sites, stated a report by Anand Rathi.
The report further stated the price of cement in the North, East, West and Central regions declined by Rs 10-15 per bag, whereas in the South prices were rolled back by Rs 20-50 per bag. As per the data, the prices peaked in April 2020 but now it has settled around pre-COVID-19 times. Cities like Delhi, Hyderabad, Kolkata among others are plagued by labour issues at unloading sites during rail transportation.
In June, the prices in the western region have declined by Rs 10 per bag. While dealers in Mumbai and Gandhinagar said that sales volumes have fallen to 50 per cent of pre-COVID-19 levels, in Surat, sales have declined to 25 per cent of pre-COVID-19 levels. The demand in urban areas originates mostly from government projects. The dealers in western region expect demand to rise only post-Diwali, the report revealed.
The report pointed out that in Jaipur, after a Rs 40-50 hike per bag till May, prices slipped by Rs 10-15 per bag in June. Due to rural (pre-monsoon) demand in the northern region, the prices have dropped and demand has pricked up. In Delhi prices have not reached pre-COVID-19 levels, however, demand in Delhi has improved by 20-25 per cent of pre-COVID-19 levels.
In the central region, dealers saw 70-80 per cent demand of pre-COVID-19 levels, mostly arising from rural areas. In this region, a bag can cost somewhere between Rs 355 and 365.
In Kolkata, prices in June declined by Rs 15 per bag. “Dealers expect companies to see 80-90 per cent of June 19 sales due to good rural demand and government projects (AIIMS, metro-rail, the PM’s Awaas Yojana).” In the low-volume context, however, discounts have increased in the eastern region. A bag here can be around Rs 330-340.
In June, prices in Hyderabad slid by Rs 30-50 per bag from May, after it was priced at Rs 70-80 per bag in April, pointed the report. “Demand has contracted from the May level due to labour unavailability.” In Bangalore, prices slid by Rs 20 per bag in June and are now at 40-50 per cent pre-COVID-19 levels.
