Industry insiders say that prices would go up by at least Rs 3-5 per 50 kg bag within the next few days. Cement prices in Delhi have been ruling in the range of Rs 134-143 for the past few weeks.

``The prices are going to climb up in the next few days and will most likely inch up further before the onset of monsoon around mid-July,'' said a senior executive of a leading cement manufacturer. ``These (expected prices) are what the prices should actually be. It will also help a lot of companies to improve their balance sheets,'' he added.

It will be for the second time in the past one month that the cement prices see a rise. Prices in north India had seen an upward revision recently by Rs 4-5 per 50-kg bag.

JK Corp's Lakshmi 43-grade cement which is being sold for about Rs 143 a bag is expected to witness an upward revision by at least Rs 3-4 in the next few days, said companyofficials.

The group's other cement brand JK Udaipur which is sold at Rs 136-137 a 50 kg bag is also likely to witness a similar price hike.

Raymond Ltd, which does not have a major market in Delhi is also expected to increase the price of its 50-kg blended cement bag, which is currently being sold at Rs 134-135. Following an improvement in demand, prices may go up soon, said company officials.

DLF Cement's 43-grade 50 kg bag which is currently being sold at Rs 137-138 is expected to go up by Rs 3-4 in the next few days.

Cement brands of Shriram Cement and Larsen & Toubro which have been selling over Rs 140 a 50 kg bag are also likely to witness a further price increase.

``April to July are good months for the industry. Also the government's positive signals for the cement industry recently are helping in the revival of demand,'' said a chief executive of a cement company.

He was confident that the market will be able to sustain this current rally of price hike as the rates had been quitesuppressed for the past several months and also as it was purely demand-led.

Signalling an early turnaround in the cement industry, cement production and despatches in the first two months of the current financial year had witnessed an over 22 per cent growth. Production in April-May 1999 was 16.27 million tonne, as against 13.27 million tonne for the corresponding period of the previous financial year.

In May alone, the production was up by over 16 per cent to 8.14 million tonne as against 7 million tonne in May 1998. Despatches in the two-month period stood at 16.14 million tonne from 13.13 million tonne in the same period of the previous year.

Insight

In line with trend
Every year, prior to the monsoon, cement prices are hiked so as to cushion the blow of the decline during monsoon. This year also, the same trend is observed all over the country and Delhi has not been an exception. Normally, the price differntial between 43 grade and 53 grade cement is around Rs 10 per bag. Delhimarket is prominently HDPE market (cement in an HDPE bag costs Rs 4 per bag lower than cement in a paper bag). Adjusted for this, the prices in the capital is still lower than the other three metros. One reason could be proximity to cement surplus Rajasthan.

Urmik Chhaya