Cement demand to tank 22-25% in current fiscal: ICRA

New Delhi: The demand for cement is expected to go down by 22-25 percent in the current fiscal as there have been restrictions on construction activities due to the lockdown. The cement makers in the country may also see their operating profitability fall by as much as 150-200 basis points (1.5-2 percentage points) in the ongoing financial year, said ICRA ratings in a research paper.

Even as the demand for cement is expected to do down significantly, the prices of this construction material will remain more or less at the current levels or may fall marginally as the cement industry exhibits decent discipline in prices. 

The demand is expected to recover only in the second half of the ongoing fiscal when the monsoon are over in the country. 

The production of cement had gone down by 86 percent to 4.3 million tones due to the lockdowns. However, the pent-up demand for this important construction raw material after a complete stoppage of supply and the need to complete the pending construction works prior to the onset of monsoons in the county have helped the production to recover to 22.2 million tones in the month of May.

Housing and construction activities in the rural side of the country is expected to drive the demand force cement in the ongoing fiscal. The urban demand for housing and infrastructure projects are expected to take a back seat.