Cement prices rise by Rs 7 per bag in September; more hikes expected in October: Report

Cement makers are likely to announce another round of price hikes of Rs 5-20 per bag across most markets in October. However, the sustainability of these hikes will depend on a recovery in demand and whether dealers are willing to accept higher prices, according to a report by Centrum Broking.

The likely price hike by cement makers precedes the ban announced by the Delhi government on dust-generating demolition and outdoor civil construction activities from November 1, 2026 to January 31, 2027 (92 days).

Restrictions would be further tightened from December 10 this year onwards with a complete ban on all construction activities until January 20 (42 days), coinciding with the peak winter pollution period.The restrictions are likely to temporarily stall construction activity and project execution across the Delhi-NCR region.

It would be interesting to note how cement makers implement  the price hike ahead of ban on construction activities in Delhi-NCR. The ban on construction for three months will lead to a fall in demand for cement in Delhi/NCR.

Meanwhile, Centrum said the sharp rise in fuel costs in recent weeks could make it increasingly important for cement companies to push through and sustain higher realisations. Any improvement in pricing, however, is likely to remain closely linked to demand conditions.

Cement pricing momentum strengthened in September after remaining largely subdued in the previous two months. The all-India average trade price increased by Rs 7 per bag month-on-month to Rs 356 in September, following broadly flat prices in July and August.

Channel checks by Centrum indicated that prices increased across both trade and non-trade segments during the month, with the non-trade segment witnessing relatively sharper gains across most markets.

However, the brokerage noted that the increase in company billing prices has not been completely passed through to end customers in several markets. Dealers have continued to sell inventory at earlier prices in some locations as they sought to achieve quarter-end volume targets.

Centrum said cement demand during the second quarter of FY27 was weaker than normal but the slowdown was less severe than the typical seasonal pattern. Activity picked up in several markets towards the end of the quarter, creating scope for companies to attempt additional price increases in October.

The brokerage cautioned, however, that the ability to retain these higher prices will ultimately depend on the pace of demand recovery.

Demand remained broadly range-bound across several markets during July and August, while regional trends were mixed in September. Weather conditions also played a role, with heavier rainfall disrupting construction activity in some areas, while relatively lower rainfall supported construction work in other markets.

On a regional basis, South India recorded the strongest price increase in September, with average prices rising by Rs 11 per bag. West India followed with a Rs 9 per bag increase, while Central, East and North India each reported a Rs 5 per bag rise.