Demand For Cement Expected To Go Down By Half In Q1 of FY21: Ind-Ra

New Delhi: Demand for cement is likely to go down by half in the first quarter of the current fiscal as compared to the same period of previous fiscal.

The demand is expected to take a hit of 45-50 percent in the first quarter of the ongoing fiscal, according to India Ratings and Research.

The growth of the cement sector is expected to be negative 4-5 percent in the first quarter. With falling demand in financial years 2019-20 and 2020-2021, the capacity utilization of the cement plants in the country are expected to go down to just 61 percent in the current fiscal  a historical low.

In the second quarter of the current fiscal, the growth of the industry will be low single digit.  

Even the capital expenditure plans of the cement companies could take a hit in the current fiscal. In case of 20 percent slippage in capacity additions, the capacity utilization can go up 62 percent. 

The cement makers with coastal grinding units that rely on import of clinker are expected to operate at lower rates till the time there is normalcy at ports.

The demand will be a complete washout in April 2020. Even in May, there will be a lower demand to the tune of 40 percent as compared to May 2019.