The cement bag became costlier by Rs 30 to Rs 50. Due to increase in cost, companies increased the price of cement by 12 percent. After the inflation of cement, buying or repairing a house will become more expensive. Why only the house, the construction cost of all the projects including roads, bridges, culverts, schools will also increase. That is, in the coming days, if the pace of any government project is seen slowing down or if the demand of rural laborers decreases in any government project adjacent to the village, then you will not be surprised. The effect of increased prices of cement is everywhere from the common man to the budget of the government.
After steel, the cost of cement is the highest in the construction of a building. The contribution of steel in the construction cost is about 25 per cent, while that of cement is about 16-17 per cent.
Now understand why cement prices increased?
Companies are raising prices citing increased cost. The prices of imported coal are sky high. Due to which the expenditure on cement production has increased. On top of that, the cost of transportation has also increased due to the cost of petrol and diesel. Cement companies believe that their cost of production has increased by Rs 60-70 per bag. While the prices did not increase that much…. That is, another wave of increase in cement prices may come.
consumption is expected to increase
Cement prices have increased at such a time. When the economy is recovering from the impact of Corona and consumption is expected to increase in the country. Rating agency Icra believes that during the financial year 2022-23, cement consumption in the country can increase by 7-8 percent to reach 382 million tonnes. The consumption in the last financial year is estimated to be 355 million tonnes. The benefit of increasing prices in increasing demand will be reflected in the balance sheet of cement companies. Yes, people using cement will have to fight a battle of inflation here as well.
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In the first 6 months of the last financial year, there was an increase in demand, although later the demand became sluggish. However, unseasonal rains and labor shortage at that time affected the demand. At present, the sector is expected to be helped by affordable housing schemes being built in smaller towns and the demand is expected to remain in the range of 5-7 per cent this fiscal, although due to higher costs, there is an apprehension that there will be a limit in demand. There won’t be much advantage. On the other hand, if the prices increase further, pressure is possible.