FCC

Demand and supply dynamics of cement & factors that influence pricing

2021-11-27

Demand for cement in volume is expected to grow at a CAGR of 7 per cent between FY20 and FY26, according to Emkay Global Financial Services. Investments in infrastructure, the healthy revival in demand for housing and various government initiatives will spur this growth. However, Holtec Consulting India estimates that the next two years or so will see a higher growth rate, as the latent demand (accumulated) from the past two years is realised, according to Jagdeep Verma, Head - Business Consulting. Thereafter, he expects cement demand to stabilise at 6-7 per cent per annum over the medium term.

Demand drivers

Housing is the major demand driver for cement in India; rural housing and affordable housing together account for 40-45 per cent of demand, and urban housing for 20-25 per cent, observes Anupama Reddy, Assistant Vice President & Sector Head, ICRA. ?Infrastructure accounts for 23 per cent and industrial capex for 10 per cent.?