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Cement prices in India have risen sharply this fiscal year, mainly due to higher fuel costs, especially petroleum coke (petcoke). The average price of a 50-kg bag reached INR 360 in May 2025, up 8% from last year. Despite this increase, demand has remained strong, growing 9% in May, supported by housing and government infrastructure projects. Rising global fuel prices and the rupee's depreciation have added to cost pressures for Indian manufacturers. Even so, Indian cement remains competitive globally at USD 92 per tonne, compared to USD 140 in the USA, USD 229 in Germany, and USD 54 in China.
Cement prices in India have experienced a significant escalation this fiscal year, with industry data indicating that the all-India average price for a 50-kg bag reached INR 360 in May 2025. This rise of 8% compared to the previous year is largely attributed to upward pressure from soaring input costs, primarily petroleum coke (petcoke). The price increase is not uniform, with eastern markets like West Bengal seeing the sharpest hike of INR 20 per bag, while western regions have seen a more modest rise. Advertisement
The primary driver of this cost inflation is the price of petcoke, which constitutes over 50% of the cement industry's fuel mix. International petcoke prices have surged to nearly USD115 per tonne, their highest in four months. For Indian producers, this has added roughly INR 75 to the cost per tonne, with INR 60 coming from the price increase itself and an additional INR 15 from the recent depreciation of the rupee against the US dollar. Companies with a high reliance on petcoke, such as Shree Cement and JK Cement, are particularly exposed to these cost pressures.
Despite the challenges posed by fuel and power costs, which account for up to 35% of production expenses, the demand for cement remains strong. Analysts project a 6-7% growth in volumes for FY2026, driven by continued government spending on infrastructure and a robust housing market. Even with the recent hikes, cement prices in India remain competitive globally, with a per-tonne cost of USD92. This is significantly lower than the USD 140 per tonne in the USA and USD 229 per tonne in Germany, although it is higher than the USD 54 per tonne price in China, a country experiencing oversupply and a property slowdown.
The industry is exploring domestic alternatives to imported fuel, but cement prices are likely to remain firm or even rise through FY 2026 as long as fuel costs stay high. Optimism is further supported by India's long-term growth potential, with per capita cement consumption still far below that of major economies like China and Turkey.
Source- PTI
5th Jun, 2025
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