Housing sector, infra spend to boost FY22 cement demand

NEW DELHI: Faster-than-expected recovery in the Housing sector along with government's thrust on infrastructure spending is expected to boost cement demand by 10-12 per cent in FY22. The growth comes after cement demand declined in FY20 by (-) 1 per cent and (-) 11 per cent in FY21.

"Pent-up demand and low interest rates have driven the realty sector amid the pandemic, and, the government's push towards big-ticket infrastructure projects has increased the growth momentum for the highways sector," said ratings agency Brickwork Ratings (BWR). "An improvement in these two sectors, which are among the largest consumers of cement, indicates a strong recovery path for the cement sector."

According to the agency, growth momentum is likely to continue, and production is expected to grow by lower double digits in FY23. "A strong demand recovery shall support cement prices as the prices of raw materials such as limestone and pet coke have already witnessed an upward trend."

"Furthermore, with an increase in power, freight and logistics costs, BWR expects overall cement prices to increase by 6-8 per cent year-on-year." (IANS)