Cement offtake drops 25% in April-June: ICRA

‘Pent-up demand to drive sales in Q2’

TIRUCHI, TAMILNADU, 05/01/2015: The sale of Amma Cement has started in Tiruchi on January 05, 2015. It will be available at 470 outlets across the State. Photo: B. Velankanni Raj

The second wave of COVID-19 has adversely impacted the domestic cement sales in the April-June quarter, reducing 25% on a quarter-on-quarter basis but pent-up demand is expected to push up volumes starting in the July-September quarter, as per a report.

In April, when the second wave was on the rise, domestic production was down 35% month-on-month in April and 4% lower in comparison with the pre-pandemic April 2019, said ratings agency ICRA.

Unlike last year, rural areas have also been impacted in the second wave.

“The recovery in the rural regions is expected to be gradual,” it said. However, it added that pent-up demand is likely to drive offtake once lockdowns are relaxed.

ICRA AVP and sector head Anupama Reddy said cement firms have raised prices by an average of 5% in April from a year earlier, spurred by the rise in input costs, primarily power & fuel and freight expenses.