Cement production hiked to meet demand
After months of lacklustre performance the cement industry is staging a recovery of sorts riding the crest of an increase in demand from the residential and infrastructure development segment. According to the latest CMIE data, cement production grew by 11.9% in May to touch 166.7 lakh tonnes as against 148.9 lakh tonnes in the same month last year. Cement despatches also showed an upward increase growing by 10.7% at 164.5 lakh tonnes.
While the demand from the cash starved builder community continues to be subdued, the slew of ongoing mega infrastructure projects across the country and a steady demand revival in the residential segment across Tier II and III cities are the two main drivers responsible for the improved performance by the cement industry in the last two months.
Demand is expected to rise further with many prominent developers opting to raise funds through the QIP route to complete their unfinished projects. While cement manufacturers are now bullish about the future, end users also have reason to celebrate with the increased demand not translating into higher prices thus far.