Cement companies in the Western region particularly UltraTech and Ambuja Cements can breathe easier now as the Government has lifted the prohibition on cement exports from Gujarat ports.
These ports account for the major proportion of cement exports from India. This ban was imposed in mid-April to improve cement supplies and contain inflation. But the ban was lifted on Tuesday in anticipation of lower domestic demand for cement in the monsoon months starting from June.Impact on price
The effect of the ban was evident in April, with cement prices coming down by Rs 10-15 per bag in Gujarat. ACC, the largest cement manufacturer in the country, announced that it would hold prices for two-three months, in response to the government's proposal.
Following this, the industry too came forward to reduce prices by Rs 3-7.5 per bag from the prevailing levels.
While easing of the ban may open up export avenues for producers ahead of the lean season, it may not have any near-term impact on cement prices in the Western region.
Slackening cement demand due to the monsoon may prevent a very sharp recovery in prices.
The move cheered cement stocks with Ambuja Cements gaining (6.5 per cent), UltraTech (2.9 per cent) and Gujarat Sidhee Cements (up 4 per cent) reacting positively to the news.react positively