Cement prices expected to weaken in Oct-March period: CMIE

MUMBAI: Woes of the cement industry are likely to continue as prices are likely to weaken during the remaining period of the current fiscal on the back of highest ever capacity addition by the industry in a single yea

"(Cement) prices are expected to weaken across cities in October-March 2009-10 because the industry will add another 30 million tonnes of new capacity," Centre for Monitoring Indian Economy said in its October review.

The industry commissioned 18 million tonnes of fresh capacity in the first half of the current fiscal and with that, the installed capacity of the country was likely to touch 276 million tonnes at the end of March, 2010.

This year the capacity addition would be the highest ever by the industry in a single year.

"Given that cement consumption was 177.8 million tonnes in 2008-09, this additional capacity will put pressure on the utilisation levels and consequently, cement prices," CMIE said.

It will also put pressure on the realisations of companies.

Cement prices fell across the country in September despite a strong demand. In the southern region, where most of the new capacity came up, prices tumbled by Rs 7-24 per bag of 50 kg. The West and the East saw an average fall of prices by Rs 2 a bag.