India: Indian cement companies are facing a shortage of coal from Coal India Ltd, the country's largest producer. However they are unlikely to be affected by this due to the high levels of imports, a cement trade official has said.
"Most cement companies import up to 70%-75% of the coal needed to run their captive power plants. As of now, I don't expect cement supply to be affected by the coal shortage," said Sanjay Ladiwala, president of the Cement Stockists and Dealers Association of Bombay.
A brokerage report by Emkay Securities has stated that large cement companies such as ACC, Ambuja Cements and Ultratech Cement source around 20% of their thermal coal needs from Coal India's monthly electronic auctions. The report also said that Coal India has diverted the 4Mt for auction in October 2011 to power generation companies. This could lead to some cost escalation for cement producers as they have to rely on higher-priced imported coal.
Separately, Ladiwala said that cement prices rose across most of the country in October 2011, except in southern regions, as demand from the construction sector revived after the summer monsoon rains ended.
