Cement demand in India remains low with cement output only expanding by 1.8% from April to August 2015, compared to the same period of 2014. Industry experts believe demand for the material is lacking due to small government investment, weak housing demand, and a shortage of rains that reduces rural purchases.
Despite reduced demand, the price of cement in India’s northern region has increased in recent weeks by between 8% and 10% or INR 25 (US$ 0.38) and INR 30 for each 50kg bag. For some states like Punjab and Rajasthan, the price hike was even higher at between INR 70 and INR 100 for a 50kg bag of cement during September 2015. Market experts say price surges were driven by a pick-up in construction projects. However, overall demand for cement in India is still weak considering that existing plants are only said to be using 65% of their total production capacity.
