Cement price outlook: Surge predicted; capacity expansion & demand dynamics explained

New Delhi: The cement industry may see a sharp rise in prices in the first quarter of 2026. The reason for this is said to be the late effect of strong demand and large capacity increases according to the weather. This is stated in a report by HSBC Global Investment Research. The report states the cement industry could announce a big price hike in the first quarter of 2026 and due to strong seasonal demand, some effects of these increases will be easily absorbed in the market.

The report also states that even though the production capacity of the cement industry has increased, its effect will not be visible immediately. According to the report, more than 100 million tonnes of new capacity is expected to be added to the industry during FY26-27, which is more than the growing demand. However, the real impact of this potential will be seen in the later part of CY26, which may keep the cement prices high in the first half of CY26.

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The report also stated that the second half of the year 2025 was weak for the cement sector. During this time the capacity to raise prices was low and realization was also slow. This was said to be disappointing, mainly due to weather constraints and slowing down government expenditure on infrastructure projects. Moving forward, the speed of demand is now expected to be normal as compared to the sharp rise after Covid.

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HSBC believes that the December quarter may remain weak, especially due to the fall in prices in the eastern and southern regions. Cost-related pressure can also affect profits. A possible increase in the prices of Pet Coke may increase the input cost. However, these pressures will be temporary and the situation will improve in the coming quarters as prices improve and sales increase.

The report also states that cement companies have started the process of raising prices in major markets. Cement companies have raised prices in south and east India in late December or early January or are likely to increase during January. Although it is not expected that all the announced price hikes will be fully implemented, some hikes will definitely show effect.