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Cement Sector Check - Cost Pressures Ease Amid Price Hikes: ICICI Securities

Cement Sector Check - Cost Pressures Ease Amid Price Hikes: ICICI Securities

<div class="paragraphs"><p>Construction worker applying cement on a brick wall. (Source: freepik)</p></div>
Construction worker applying cement on a brick wall. (Source: freepik)

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ICICI Securities Report

Our channel checks suggest industry volumes are likely to report flat to low single-digit volume growth YoY (despite high base) during August 2022 to ~29 million tonne, implying a relatively strong pan-India clinker utilisation at ~70% this monsoon.

Month-on-month volumes may be down 6-8%, in-line with seasonality. On the pricing front, average pan-India prices fell ~2% month-on-month in Aug-22 largely due to 4% month-on-month dip in East India.

However, prices were hiked by Rs 15-20/bag (up 4-4.5% month-on-month) in East and West India (in the non-trade segment) with-effect-from September 06, 2022 with possibility of a further hike of Rs 15/bag from mid-September 2022 in East India.

Spot international petcoke prices have slightly increased to $196/tonne in September 2022 (up ~3% month-on-month), though it has corrected ~30% from peak in April-22.

Similarly, domestic petcoke prices declined ~30% from its peak in June-22 to Rs 16,000/tonne in September-22.

Click on the attachment to read the full report:

ICICI Securities Cement Sector Update.pdf

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