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Trade and pricing news from India’s cement industry

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Cement trade threatened by storage price hike

A fresh argument has broken out over India-Pakistan cement trade as the Land Port Authority of India (LPAI) has hiked storage charges from Rs.20/t to Rs.100/t from 1 October. Traders have threatened to halt imports unless the prices are rolled back to previous levels, calling the new charge ‘uneconomical’. Under the banner of the Confederation of International Chambers of Commerce and Industry, a letter has been written to the LPAI requesting the price hike be withdrawn in order to ‘save bilateral trade between India and Pakistan through Attari-Wagah land route’. Traders were already unhappy with the state of the existing infrastructure, seeking improvements to platforms and storage space. They say this latest blow may kill trade between the two countries.

JK Cement expansion will boost market share

Analysts predict that JK Cement will do well out of improving prices in the cement industry in addition to capacity expansion projects. White cement production has risen from 0.4 million t to 0.6 million t, while in the north of India two expansion projects that will boost capacity by 3 million t (combined) are on schedule for completion next year. Results for 2Q14 are expected to be slightly down due to lower sales in the south of India. However, better earnings are predicted following 1H14 when cement demand is expected to recover.

Cement prices rise

According to The New Indian Express, rising cement prices have brought the construction industry to a standstill as manufacturers increase prices by Rs.35 – 65 per 50 kg bag. Builders associations have reportedly demanded government intervention, as construction costs go up by 15%. Alex P Cyriac, state chairman of the Builders’ Association of India in Kerala, is quoted as saying, “As the representatives of the biggest industry in the state, we ask the government to rescue all the stakeholders from the current crisis of abrupt hike in cement prices. On an all India basis the cement price hike is a scam at least worth Rs.75 000 crore. It is a serious issue and needed to be probed thoroughly”.

The newspaper reports that prices are likely to continue on an upwards trend. Last month we reported that the Confederation of Real Estate Developers’ Associations of India (CREDAI) was considering raising a cartel complaint with the CCI over the price hike, which producers put down to increased input costs.

Written by Katherine Guenioui

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