Mumbai: Cement industry may witness price hike in seasonally strong quarters of March and June, a Credit Suisse report said.
"Cement prices may increase in seasonally strong quarters. Demand pick-up in seasonally strong quarters of March and June should drive accretive price hike for the sector," Credit Suisse said in its research report on cement sector.
Credit Suisse said it expects maximum accretive price hikes in northern India followed by eastern and southern markets.
"Cement prices in northern India have started recovering after significant decline in the months of November, 2012 to January, 2013. Maximum accretive price hike is expected in northern India as new supply stress model suggests low supply pressure in two-thirds of Indian cement demand.
The report pointed out that weak demand in northern India has impacted the western region. Producers from northern India have been targeting Gujarat due to sluggish demand in their region.
"We expect demand to improve post winter in northern India, and elections scheduled in Rajasthan and Delhi, which account for 40 percent of northern region demand, should also support infrastructure-related demand."
Pricing for eastern India continues to be strong with price increases of Rs 30-40 per bag in February, 2012. Current price in Kolkata of Rs 380 per bag is close to peak of Rs 385 per bag last year.

Supply pressure in eastern India in FY14 is low and thus strong pricing is likely to continue, Credit Suisse said.


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