Cement stocks continue to bleed; Shree Cement, JK Lakshmi slip

Cement stocks ended mostly in red despite the oil minister on Tuesday asking government-owned oil firms to boost supply of gas and alternative fuels in states where petroleum coke and furnace oil were banned due to high emissions.

The Supreme Court had banned the use of petcoke and furnace oil in states around New Delhi and in the national capital to rein in pollution. Demand for petcoke has doubled in the past four years.

The court banned the use of key raw material — pet coke and furnace oil — in Uttar Pradesh, Rajasthan, and Haryana. The move, aimed at curbing pollution, could impact their earnings by as much as 8 per cent in 2017-18.

Market experts believe that companies like Shree Cement and JK Lakshmi Cement are largely dependent on pet coke. Shree Cement and JK Lakshmi Cement closed 3.27 per cent and 2.38 per cent down at Rs 16950.80 and Rs 398.70, respectively, on Tuesday.

Other cement makers such Ambuja Cement Ltd and UltraTech Cement Ltd settled 1.23 per cent and 0.75 per cent down at Rs 261.75 and Rs 4,161, respectively.

ACC closed 0.09 per cent down at Rs 1,704.75.

The prohibition of usage of pet coke in the states will result in higher fuel cost for cement companies operating out of these states.