IGI Logo

Early monsoon & heatwaves impacting demand

Quick Pointers:

* Cement prices rose by Rs8–10/bag in the North, South and East in May’25, but remained flat in the West, and declined Rs5/bag in Central region. All-India average price rose ~Rs5/bag MoM.

* Dealers expect prices to remain flat in Jun’25 with the onset of the monsoon.

We interacted with cement dealers across regions in India to assess the demand and pricing scenario in May’25. Our discussions indicate mixed demand scenario across regions. Prices declined in certain markets due to extreme heatwaves affecting labor availability. Early onset of monsoon further added pressure, leading to a slowdown in construction activities in some regions. Northern, Southern and Eastern regions witnessed a price hike of Rs8- 10/bag, while prices in the West remained flat and Central region declined by Rs5/bag. As a result, all-India average price rose by ~Rs5/bag MoM, reaching Rs365/bag by May-end. Going forward, dealers anticipate flat pricing due to the onset of monsoon.

We expect a gradual slowdown in cement demand as monsoon intensifies in June, leading to a decline in government construction activities. The IHB segment is expected to provide some support, as interior work is not likely to halt completely during the monsoon. We believe recent price hikes were also aided by uptick in pet coke prices which have softened now post sharp fall in crude oil prices. Monsoon being a seasonal factor, we expect some softness in pricing led by demand. As demand improves from 2HFY26, we expect prices to react depending upon completion status of upcoming ~60mtpa capacities across regions. We continue to remain positive on the sector and prefer industry leaders, on their superior execution and long term cost efficiency measures adopted to improve margins.

Northern region

Cement prices in Delhi increased by Rs10/bag during the month. However, demand remains low due to labor shortages witnessed since Apr-end and extreme heat conditions until 20th May. Dealers are still unsure when laborers will return to worksites for demand to pick up. Going ahead, price hike is not expected in June with the onset of monsoon.

Jaipur cement prices increased by Rs8-10/bag across brands amid better demand, led by purchases by farmers. May, being a non-harvesting period, is when farmers typically receive payments for their crops, giving them the time and resources to build their houses and complete construction activities. Dealers do not expect prices to rise further, given the likelihood of early monsoon onset this year..

Above views are of the author and not of the website kindly read disclaimer