Cement stocks rallying in trade, here’s why

Star Cement expects prices to firm up further post-Diwali

International coal prices have started correcting big time and are down around 40 percent from recent peak levels. The fear was that if spot coal prices are USD 200 per tonne, it could impact costs for cement companies by Rs 500 per tonne.

Additionally, it was a good Diwali for cement companies post the Indian government’s decision to cut excise duty on petrol by around Rs 5 per litre and diesel by around Rs 10 per litre.

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Reports this morning suggest that Coal India could possibly be delaying the upward revision of coal prices, which brings us to the third point- cement demand is likely to bounce back post festive season as well as post monsoon lull that was seen in the month of September.

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Now the demand is expected to pick up and pricing is likely to go through, coupled with the fact that the worst in terms of cost pressures could be behind, which explains why the cement companies are rallying today.