Coal news and updates

India’s cement production marginally rises in H1

India Coal Market Watch

 November 24: India’s cement production stood at 137.32 million tons (mt) during the first half (H1) (April-September) of 2015-16, resulting in a 1.26% rise compared to 135.61 mt produced during H1 of 2014-15.

 Moreover, Indian cement production stood at 66.07 mt during Q2 (July-September) of 2015-16, resulting in a marginal increase of 1.63% compared to 65.01 mt produced during the second quarter (Q2) of 2014-15.

 However these happy tidings are short-lived when one looks at the other figures.

 Cement production during Q2 of 2015-16 has dipped 7.27% compared to 71.25 mt produced in Q1 (April-June) of the same fiscal.

 And the monthly slide in production still gives no sign of stopping. After touching a high of over 24 million ton (mt) levels in May 2015, India’s cement production continued to slide and fell back further to 21.46 mt in September, largely due to a dearth in demand that resulted in under-utilisation of production capacities.

 According to data available with ICMW, India’s cement production in September dipped by 0.74% to 21.46 mt from 21.62 mt in August 2015.

 India’s installed capacity is around 386 mt and capacity addition is expected to dip in the coming year. In the next three years, ie, 2015-16 to 2017-18, a volume of 40 mt is expected to be added to capacity. During this period, incremental demand could be 60 mt.

 As per statistics, the Indian cement industry is riddled with over-supply. Cement volume growth has been weak in the past 3-4 years, led by a slowdown in infrastructure, commercial investment and housing.

 In financial year 2013-14, while production was at 364 mt, demand was 247 mt, resulting in a gap of 117 mt of oversupply. In the year 2014-15, the gap was wider at 130 mt. Surplus capacity is expected to be reduced by around 100 mt by 2017-18.

 The following table shows India’s month-wise cement production in 2014-15 and 2015-16:

*The production figures of April, May, July, August  and September 2014 have been revised, as per data available to ICMW.