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• Cement companies are contemplating increasing prices by around two to three per cent this month to mitigate the impact of high coal prices on their profit margins, said credit rating agency Crisil.Vinod Juneja, managing director at Binani Cement said, “So far we have not yet decided on price increase but definitely we will like to pass on the rise in input costs to consumers.” He added that his company is witnessing strong demand, as this is the peak season for construction activity.A Crisil report released on Monday said that cement players would try to pass on the cost increase resulting from the new pricing policy adopted by Coal India. Hence pan-India cement prices are expected to rise by two to three per cent in January.

• “Improved pace of construction activity will support demand growth during the month, aiding price rise,” said Ajay D’Souza, head at Crisil research. However the president of Cement Stockists and Dealers Association said the price hike will be partial. “It is difficult to increase price immediately in the Northern region as demand is sluggish due to winter.”On an average a 50 kg bag pan-India costs around Rs 265. Rajesh Kumar Ravi, an analyst at Karvy Commodities said, “In the first nine months of this financial year demand has grown by six per cent only which is not very encouraging.”He added that since prices are already at a higher level one will need to watch, “Whether further increase in cement prices will be sustainable or not.” After demonstrating a steep rise in cement prices over the past few months cement prices have corrected by around one to two per cent in the month of December 2011.However Vineeta Singhania, managing director at J K Lakshmi Cement said, “Definitely we will like to pass on the price hike to consumers but we will have to see whether the demand supports it. In North India demand is usually sluggish due to severe winter. From February onwards demand is likely to pick up and we will take a call accordingly. State-run Coal India had announced a change in the pricing method for its non-coking coal effective from January 1, 2012. Singhania said in December 2011 the demand growth in the industry was only three per cent compared to a year ago.

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