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May 24, 2001
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Money > Business Headlines > Report May 24, 2001 |
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Cement majors weigh Rs 10 hike in pricesRumi Dutta Leading cement companies, which had lowered prices by around five per cent in the beginning of this month, are contemplating a price rise to take advantage of the brief spurt in demand before the monsoon sets in. According to industry officials, the price hike being considered was in the region of Rs 10 per 50-kg bag in Bombay, which would again push prices back to the five-year high levels. The marketing head at a city-based cement major said, "The proposed price hike will again take prices back to the Rs 182-184 per bag range, which had been a stable level for the last few months." "The recent price cut was a temporary arrangement to overcome the then prevailing situation where smaller players were undercutting prices offered by larger companies," another official said. At present, cement prices in Bombay are ruling around Rs 172 per 50-kg bag. Analysts feel that cement companies are experimenting a price hike keeping in mind that in case the rise is unsustainable, they will roll back the prices to the existing levels. With a six per cent demand growth in last month against a negative growth in the previous year, there exists a fair possibility of a price hike. Moreover, prior to the monsoons this would be the final attempt by the cement manufacturers to boost their bottomlines as with the onset of monsoons the prices would crash. A K Jain, president, marketing at ACC, said, "The current demand scenario is seasonal by nature and the demand growth this month is expected to be better than the previous months." The supply overhang in the beginning of this month was an outcome of the manufacturers pushing more stock into the market to meet their targets. But with off-take shooting up again in the last couple of weeks, inventories have declined to a manageable level thereby prompting a possible price revision. Powered by YOU MAY ALSO WANT TO READ:
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