Cement prices to surge on the back of rising coal costs

Cement prices are set to rise from December, to balance the increasing input cost of coal, especially the imported variety, which is used as a heating agent.

The imported coal cost used to be 50% of Indian coal. But, it has become too expensive in recent times due to a four-fold jump in values. The companies have no other option except to raise the cement costs to recover the expense.

Coal is a vital element in cement production as it is utilised as an energy source and needs large quantities. A high-temperature kiln, fuelled by coal heats the raw materials like limestone and converts them into clinker. Later, the clinker is combined with gypsum, ground to a fine powder and made into cement.

About 100 kg of Indian coal is needed to produce one tonne of cement. When it comes to imported coal, just 70 to 80 kg are required for the production of one tonne of cement, given its superior quality. When it comes to power, 75 units of electricity are needed to produce the same cement amount.

Presently, retail costs of cement are in the range of Rs 370 to Rs 400 per bag. Coming month, when the season for construction activity peaks, the values could increase by about Rs 40 per bag, and high-grade cement may cost Rs 450 per bag.

In Telangana, around 15 firms involving Orient, Sagar Cements, Anjani Cements, India Cements, Penna Cements and Zuari Cements produce and supply cement both within the state and for the rest of the nation, mostly from the Nalgonda cluster. There is a demand for 10 million tonnes of cement per annum on average, of which five million tonnes are only required in Hyderabad.

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