Cement prices may go up by ₹25-50 per bag in April: Crisil

‘Manufacturers start to pass on rising costs due to the Russia-Ukraine conflict’

Cement prices in the domestic market may go up by ₹25-50 per bag this month as manufacturers have started to pass on the rising costs due to the Russia-Ukraine conflict, Crisil said in a report.

"After rising to ₹390 per bag over the past 12 months, domestic cement prices are set to climb another ₹25-50 across regions in April as manufacturers start to pass on rising costs due to the Russia-Ukraine conflict," Crisil said in the report.

Crude oil prices rose to an average $115 per barrel in March, it said.

Besides, international coal prices have also increased due to various factors, including the Russia-Ukraine conflict, weather disruptions in the key mining areas of Australia and Indonesia's ban on coal exports to meet domestic demand, it added.

"The resultant surge in power and fuel costs, in turn, has raised the cost of road freight, which accounts for 50% of cement transport. Bulk use diesel prices have been hiked by ₹25 per litre, while retail diesel prices have been increased 14 times since mid-March, taking the total increase to ₹10 per litre," it said.

According to Crisil Research Director Hetal Gandhi, cement demand increased by 20% year-on-year in the first half of FY22 but experienced an unexpected slowdown in the second half due to unseasonal rains, sand issues and labour unavailability.

"In fiscal 2023, cement volume growth will be stable at 5-7%, driven by affordable housing demand from tier-2 and tier-3 cities, along with infrastructure. However, high construction costs will limit the demand uptick," he said.