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Cement Price increase in April to help the sector tackle input cost pressure

The cement sector was hoping for a price hike in April and now as the announcement has come the sector is gearing up for another hopeful quarter. Cement companies to hike prices by Rs. 20- Rs. 40/Rs. 50 per kg bag. The new rates are applicable from today (April 1, 2022). This is the second month of price increase. After staying muted for the three months to February, prices in March have risen past the November peak.
Reasons behind the price hike
The cost pressures (higher fuel prices) lead to the price hike. Raw material prices are up 60 percent to 70 percent in the last one year. The buoyancy in cement price is expected to reduce the burden of rising raw material costs. Prices of key raw materials such as imported coal and pet coke have increased sharply by 24 percent -50 percent in the past three months. Rise in imported coal price and volatile crude oil added cost pressure. Price hike is a must in 1QFY23 to pass on the higher cost impactAlso, there has been a constant pick-up in the construction activity. Construction activity tends to pick up before monsoon and that has also been a reason for higher cement demand, eventually leading to price hike. Real estate sector too has seen good registration figures in the March quarter which gives a boost to the cement sector.
Cement Experts on price hike
Cement experts anticipate a further price hike in the coming months too and it will help companies set their margins. Higher raw material costs still to pinch cement companies going ahead. The major focus of companies will be to increase volumes. Strong momentum both in demand and supply expected to continue going further.

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