Cement prices surge as fuel and gypsum costs escalate

New Delhi: Cement prices have seen a sharp escalation in the current fiscal, following upward pressure from input fuel costs, particularly petroleum coke (petcoke), industry sources said.

The all-India average cement price reached Rs 360 per 50-kg bag in May 2025, about 8 per cent higher year-on-year after a steep decline the previous year. While regional differences persist - with eastern India seeing the sharpest increases (Rs 20 a bag in West Bengal) and western markets rising by a modest Rs 3 - the trend across the country is clearly upward. May is the latest all-India data available.

Sources said demand remains robust, growing 9 per cent in May to 39.6 tonnes, underpinned by housing and government-led infrastructure. Analysts forecast 6-7 per cent growth in FY2026 volumes to 480-485 tonnes.

The strongest upward pressure is coming from fuel costs, particularly petroleum coke (petcoke), which constitutes over 50 per cent of the cement industry’s fuel mix. In the spot market, international petcoke prices surged 17 per cent.

Typically, India’s cement industry imports 12-14 million tonnes of petcoke annually from the USA (60 per cent) and Saudi Arabia (25 per cent). For Indian cement makers, this has added Rs 75 per tonne to costs - Rs 60 from the price increase itself and Rs 15 from rupee depreciation.

Given that fuel and power typically account for 30-35 per cent of total production costs, such spikes immediately hit profitability. Companies like Shree Cement and JK Cement, which rely on petcoke for 70-95 per cent of their energy needs, are the most exposed. Even with some relief from lower coal prices, the sector is facing renewed cost intensity. agencies