Even though cement prices have seen an upside of a few rupees in some areas in the western region, analysts expect the current quarter to be a bad one overall for cement manufacturers in the country.
In Pune, cement prices have risen by Rs.5-10 per Kg bag so far this quarter to around Rs.200 for wholesale and Rs.230-235 for retail. However, the recovery comes after a fall of around Rs.40 seen the previous quarter.
It's the same in Gujarat, where prices have touched Rs.180 per bag.
In the rest of the country, prices are either stagnant or on a downtrend.
In fact, according to analysts, baring Pune, Maharashtra has seen little movement in prices. This includes areas such as Vidarbha and Nagpur.
"The incremental supply from South has stopped coming to Pune. That's the only reason the local players have seen an upside. But it is very temporary. The moment supply starts revisiting, prices will again flush." said an analyts from a domestic brokerage.
In Mumbai, the rates have remained stagnant at Rs.230 per 50Kg bag for wholesale and at Rs.244-250 per bag for retail.
A senior member of the Cement Stockists and Dealers Associations of Bombay said," The prices will stabilise a little higher as at present they are virtually loss making".
Incremental supply to Maharashtra has come down form around 6 lakh tonne to 50,000-60,000 tonne, an analyst said.
Rupesh Sankhe, an analyst with Angel Broking, said," The new despatches are happening at a higher price, bit it is not reflecting on the dealer side.
At the dealer end, the off-take is at a lower price range. The reason for the slight pick-up in pricing in Pune and Gujarat can be attributed to there being no inter-region movement. If prices fall further, they will all start making losses."
In the eastern region, retail prices have fallen to Rs.285-283 per bag from Rs.300 and above a month back.
"Prices are expected to come down further, " said a Kolkata-based dealer.
"The retail price is Rs.185-190 per bag for ratail A-grade players and Rs. 175-185 for wholesale. The builder price is at Rs 150-160. Any price rise is impossible in the present circumstance," a Chennai-based dealer said.
Dealer attributes the depressed prices to overcapacity. Installed capacity in the Southern region is at 80 mtpa, while demand stands at 65 mtpa. Tamil Nadu has an excess capacity of more than 4 mtpa. while Andhra Pradesh accounts for more than 15 mtpa overcapacity.