Chennai: Cement prices were down 11 per cent in September against the same last year owing to increased capacity addition and benign input costs. The demand too has remained flat for the construction material in the first half of the year.
In September 2024, the average cement prices decreased by 11 per cent to Rs 330 a bag. However, they increased 2 per cent on a month-on-month basis. In the first half of the FY2025, prices are down by 10 per cent. In FY2024, the average prices stood at Rs. 365/bag and the average price was Rs. 375/bag in FY2023. Cement prices have seen an all-time high level of Rs 391 per bag in FY23.
Benign input prices driven by coal, pet coke and diesel have kept cement prices under pressure. While coal prices have remained stable in the current month, pet coke prices were down 26 per cent YoY to Rs. 10,180/MT. Diesel prices also declined by 2 per cent compared to the same time last year at Rs 88/litre. In the first seven months of FY25, the prices of coal, pet coke and diesel were lower by 34 per cent, 15 per cent and 2 per cent, respectively.
Further, entry of new players in the cement sector have heightened competitive intensity and 40-42 MT of capacity additions have been bringing down the prices in FY24 after four consecutive years of price rise at a CAGR of 4 per cent from FY20 to FY23.
Cement sales volumes were down by 3 per cent in August to 33.5 million metric tonnes. In the first five months of FY25, the volumes increased just by 1 per cent to 178.0 million MT. In FY2024, volumes had increased by 9 per cent to 426 million MT.
