Cement consumption to rise 3-4.5 % in FY18

The government’s thrust on infrastructure and road sector spending is likely to be the key driver of cement demand in fiscal year 2018 (FY18), said a report by CARE Ratings. Thus, cement consumption would witness a growth of 3-4.5% during the year, which translates to 285-290 million tonnes of total consumption during the fiscal year.

However, the rating agency added that while the government’s “Housing for all” initiative, especially in rural areas, would partially compensate for otherwise sluggish activity in the real estate sector, overall demand from the housing segment for cement may see some decline during the year. The housing sector alone constitutes two-thirds of the total consumption of the building material at present. Also, it should be noted that capacity utilization is low with excess capacity already in place across regions in India and rising input costs may put pressure on the producers’ margins. The rating agency expects cement makers to take price hikes over the course of the year and pass on the burden of rising costs to customers.

Source – livemint