Cement prices in the North region has been increased by Rs10/bag to Rs570/bag due to significant rise in international coal prices over the last two months. Coal prices increased to around US$90/ton (FOB) compared to US$60/ton at end October 2020. Coal is primarily used as fuel in cement production, while some of the companies also use it for power generation purpose also. The increase of US$30/ton in coal prices translates into an increase in cost of cement production by more than Rs30/bag. In early December 2020, cement prices were increased by Rs10/bag in North. With current hike, total rise in cement price has reached Rs20/bag. It is believed that the hike in cement prices is aimed at passing on the hike in coal price, which generally remains the case in the winter season. The coal prices are expected to come down around March 2021, in that case margins of cement manufacturers can improve.
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