Coal news and updates

Though cement demand has been slack due to heavy monsoon, analysts expect the second half of FY17 to see demand revival due to rural housing, improved government expenditures in Northern states and pick-up in infrastructure projects. Prabhudas Lilladher says despite lacklustre demand, prices continued to remain strong across most regions backed by strong discipline among players. According to the brokerage firm, all India average prices for July increased 1 percent or Rs 3 per bag on a monthly basis and 1.6 percent or Rs 5 per bag over Q1FY17 led by strength in North, central and east regions but partly negated by weak prices in West and South. Prabhudas Lilladher remains overweight on the sector and continues to like ACC   for its improving quality of operations, JK Lakshmi Cement   and Heidelberg Cement on the back of attractive valuations and strong earnings outlook. Region wise cement price Bolstered by strong discipline among producers, prices in North improved further in July by 2.5 percent or Rs 8 on monthly basis and up 5 percent or Rs 15 over Q1 FY17 average, despite a steep rise in Q1 FY17. Competitive pressures due to new entrants eased in July leading to improvement in East prices, with average prices rising Rs 10 month-on-month. Compared to Q1 FY17, average prices were up 4 percent or Rs 12 per bag. In the South, discipline failed to sustain as some signs of demand revival in Andhra Pradesh/Telangana led the producers to push volumes at the cost of lower prices. Average prices in South for July declined Rs 5‐10 month-on-month, while prices were flat compared to Q1 FY17. Prices in Hyderabad were down Rs 10 (MoM), though prices were still Rs 20‐25 higher than Q1 FY17 average. Prices in Bengaluru fell Rs 7 (MoM), down Rs 3‐5 over Q1 FY17. Prices in Chennai were flat MoM. Average prices in Mumbai and Pune fell Rs 10 per bag (MoM) in July as strong rainfall led to reduced demand. Prices improved in Gujarat with demand remaining steady as weak monsoons led to continued activity. Compared to Q1FY17, average prices in July remained flat for the region, says Prabhudas Lilladher. 

 

Source:Moneycontrol.com