Displaying items by tag: Telangana

India: Singareni Collieries Company Limited (SCCL) has decided to cut coal supplies to the cement industry as it prioritises thermal power plants in Telangana and Andhra Pradesh. Power companies in the two states use 66% of coal produced by SCCL. However, the plants have been unable to work to their full capacity in the second half of 2014 due to a shortage of coal, according to SCCL General Manager S Chandrasekhar.

The decease in coal supplies to the cement producers is expected to make prices rise. Local media reports that the coal from SCCL is more suitable for cement production than power generation as it has a high ash content of 35 – 40%. SCCL is also reported to have encountered several instances of 'misuse' of allocated coal by cement companies. 160,000t/day or 16% of the total coal production is currently allocated to the cement industry and another 6.6% is allocated to captive power plants run by cement companies.

India: Cement sales in September 2011 showed signs of a revival with monsoon weather subsiding in most parts of the country. However the ongoing unrest over the creation of a new state in Telangana have affected the despatches of ACC. In addition UltraTech Cement, one of the biggest producers in the country, has not yet announced its figures for the month.

Cement demand from the real estate sector has improved with many builders putting their projects on fast track to keep up their promise of timely delivery during the festival season. But there are no substantial developments in the infrastructure sector even as some government projects have been announced.

Analysts warn that it's too early to predict a recovery in cement demand because there is no marked improvement in the economic health of the country along with continuing unstable global developments from the US and Eurozone. With concern over rising input costs and increases in lending rates still lingering, cement companies have kept their production in check in order to align with the demand.

Besides transportation interruptions, the Telangana disruption has paralysed power supplies. Big cement factories have captive power plants but smaller cement units have been badly affected. The supply of coal from Andhra Pradesh was also hit, pushing up the cost of power production for captive plants that had to rely to a large extent on imported coal shipments.

V Srinivasan, a research analyst at Angel Broking, said that cement companies are expected to face margin pressures due to higher fuel costs because of increased domestic and international coal prices. The demand revival has helped cement companies to raise prices across the country, yet despite the rise, cement producers' profitability may be under pressure due to increasing costs.