Price hikes, new rail link and unrest in India

Prices rise as sales fall

As demand in India continues to be comparatively low, prices are on the up. At present, the average price of a 50 kg bag of cement is Rs.280 – a 10% increase since the end of September. Cement sales growth, however, has reached a 10-year low. In the April – October period, sales increased by just 2.63% to 122.56 million t. In October alone, sales volumes declined by 0.7%. It is hoped that sales will increase in the final few months of this year, though analysts expect that further price increases are likely. Furthermore, capacity utilisation is at a 13-year low, and is expected to decrease from its current figure of 80% to 74% by year-end.

The price increases are a gradual response to rising input costs. For example, Coal India raised the price of coal by 30% back in February. Energy prices are high, and impact in turn on freight prices for both bringing in the raw materials and dispatching the finished product. Further increases to the price of cement are anticipated. Currently the highest prices are to be found in the eastern market, with an average of Rs.303.

New rail link

A new rail link is planned between Bangadgram and Ras, which will connect directly with cement plants in Ras and ease the supply network. At just 27.8 km long, it could be one of the shortest rail sections in India, but it is thought that it will make investment in Pali district, where Ras is situated, more appealing. Currently, sources say, cement producers are shying away from investing in the district for want of a rail link. The line is expected to be completed in December 2012 and will be financed jointly by the Railways and the cement plants.

Unrest in Jaipur

An accident at a cement plant in Chittorgarh left a man dead and his fellow workers in uproar. Police had to be called out to the plant when some 200 workers began an angry protest calling for compensation for the worker’s family. According to reports, the accident happened when the man, Babulal Gujjar, was holding up an iron pole. A plant vehicle reversed into the pole, causing it to fall on top of him. He was taken to hospital, but died on the way as a result of his injuries.

Read the article online at: https://www.worldcement.com/asia-pacific-rim/28112011/price_hikes_new_rail_link_and_unrest_in_india/