Thursday December 25, 02:45 AM

Source: Indian Express Finance

Cement prices decline on excise duty cut

Cement prices are expected to soften as cement companies have announced a price cut following the excise duty reduction announced by the government, the Center for Monitoring Indian Economy (CMIE) said. In view of the real estate slowdown, cement demand slowed down in recent months. Consequently, prices in the eastern and northern regions displayed a softening trend, the economic think-tank said in its monthly review here. The Central government on December 7 announced the much-desired across-the-board cut in excise duty. With this, packaged cement that was being charged an excise duty of 12 % will attract an 8% duty. In response to this, most of the cement companies have announced a price cut of Rs 4-6 per bag, CMIE said. We expected cement prices to soften even in the absence of recent excise duty relief, it said. Cement production grew by a healthy seven per cent to 14.8-million tonnes in October. While production in the western and central regions remained flat during the month, northern, central and southern regions posted a strong growth of 8-12 %. Coming over a low base, all-India cement production grew by 9% to 14.3-million tonnes in November 2008. Aggregate cement production during April-November 2008 posted a rise of 7.1 per cent, a tad slower than the rise of 7.7 % reported in the year-ago period. After rising by a robust 9.6 % in the preceding month, cement consumption grew by a modest 4.6% in October. The consumption was sluggish in the north, western and central regions that either reported a decline or a modest growth of 1-3 %. The east and south zones reported a healthy consumption growth of 8-12%. The cumulative consumption during April-October 2008 displayed a similar regional trend. Consequent to a consumption slowdown in these three regions the overall consumption growth decelerated to 7.6 % against a strong growth of 11.3 % clocked in the year-ago period, CMIE said. PTI