Cement production likely to rise 6.4% in FY'13: CMIE

 MUMBAI: Country's cement production is likely to rise by 6.4 per cent this fiscal, following an estimated growth of 4.8 per cent in December-March 2013 quarter, Centre for Monitoring Indian Economy (CMIE) has said.

"Cement production is likely to grow by 4.8 per cent between the December-March 2013 periods. The year 2012-13 is expected to end with a 6.4 per cent growth," it said in its monthly review.

The demand for cement is expected to improve as construction activity picks up in coming months. However, the growth may moderate as the effect of low base wanes. The dispatches are also likely to rise at a similar pace as production, it said.

Cement production rose by 7.3 per cent in October 2012 to 199.1 lakh tones. This was over a 1.5 per cent growth in the corresponding month a year ago. When compared to September, production was nine per cent up during the month.

During the April-October 2012 period, cement production grew by 8.4 per cent compared to 2.9 per cent in the year-ago period. Low base and improved demand is likely to have aided the healthy growth in production.

Cement prices have been showing an odd trend since the past few months. Unlike every year, prices remained strong during the monsoon. In contrast, prices have declined post monsoon when they were expected to improve, CMIE said.

The prices were hovering around Rs 305 per 50 kg bag in December, 2012 as compared to Rs 323 per bag in July, 2012 and Rs 314 per bag in October, 2012.

Weak demand due to subdued construction activity and capacity overhang in the industry are the reasons behind the fall in prices, CMIE said. Prices have fallen across the board during the month but as demand is expected to improve in the coming months, prices may remain stable or rise marginally, it added.