Monsoon blues cloud July cement price outlook
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Live Events as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add Now! (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel New Delhi: Cement prices are expected to remain largely flat in July as the monsoon season and weak underlying demand continue to weigh on the sector, according to a report by Centrum.The report said demand during the first quarter of FY27 remained range-bound and below expectations, with dealers across markets pointing to subdued construction activity, labour shortages, elections, heatwaves and slower execution of government projects as the key reasons behind the weakness.According to the report, some recovery was witnessed in June due to the delayed onset of the monsoon and quarter-end volume push. However, dealers do not expect any meaningful increase in cement prices during July."Dealers across most markets do not expect any meaningful price hikes in July, as the monsoon and weak underlying demand are likely to keep prices under pressure," the report said.Centrum noted that while some markets may witness attempts to raise prices, dealers believe such efforts are primarily aimed at protecting existing price levels rather than pushing through significant increases.The report highlighted that the sharp correction in prices following the rollback of April price hikes has largely played out across most regions.However, it added that the seasonal slowdown in construction activity during the monsoon is expected to continue impacting demand and pricing in the coming months."While selective markets may witness price hike attempts, dealers believe these are largely intended to defend prevailing price levels," the report said.The brokerage further noted that pricing pressure is likely to persist through the second quarter of FY27 as monsoon-related demand softness continues.Dealers remain cautious about the sustainability of any price increase attempts and do not rule out further weakness in cement prices during the peak monsoon period.According to the report, the combination of subdued demand and seasonal factors is likely to limit the industry's ability to raise prices in the near term.While June saw some improvement in volumes due to delayed rains and quarter-end sales efforts, the broader demand environment remains challenging, with construction activity yet to witness a strong recovery.Centrum said dealers across most regions continue to expect a difficult pricing environment during the monsoon season, with limited scope for meaningful price hikes unless demand conditions improve significantly.The report suggests that cement companies may continue focusing on maintaining current price levels rather than pursuing aggressive increases as the sector navigates weak demand conditions and seasonal headwinds in the coming months.
The BriefWire