Cement prices may soon dip on supply glut

MUMBAI: ACC, Ambuja Cements and Grasim Industries may soon cut cement prices as the commissioning of new plants has improved supplies and a late monsoon has slowed construction activities, thereby affecting demand, say cement dealers.

���Prices are likely to soften going forward,��� said Sanjay Ladiwala, president of Cement Stockists & Dealers Association. India has more than 70 cement companies and a total installed capacity of 220 million tonnes. According to the Cement Manufacturers��� Association (CMA), about 110 million tonne of capacity could be added at an investment of about Rs 50,000 crore over the next three years.

���We still expect a healthy demand, but prices could come down by Rs 5 per bag in the next few weeks and another 4% by December depending on capacity additions,��� said Ajay Kapur, head (commercial and marketing) of Ambuja Cements.

A drop of Rs 5 will bring retail prices to Rs 260 per 50 kg bag in Mumbai, Gujarat and the Southern India and to around Rs 250 a bag in the northern and eastern parts of the country. HM Bangur, managing director of Shree Cement and president of CMA said a fall in prices will erode profitability.