The cement industry may see a sharp increase in prices in the first quarter of 2026. The reason for this is said to be the strong seasonal demand and the delayed impact of large capacity increase. This has been said in a report by HSBC Global Investment Research. The report said, we expect that the cement industry will see a large price increase in the first quarter of 2026 and due to strong seasonal demand, some of the impact of these increases will be easily absorbed in the market.
It has also been told in the report that even though the production capacity of the cement industry has increased, its effect will not be visible immediately. According to the report, the industry is likely to add more than 100 million tonnes of new capacity overall during FY26-27, which is more than the growing demand. However, the real impact of this capacity will be visible in the later part of CY26, which may lead to cement prices remaining high in the first half of CY26.
The report also said that the second half of the year 2025 was weak for the cement sector. During this period, the ability to increase prices remained low and realization also remained slow. This was described as disappointing, mainly due to weather-related disruptions and slow government spending on infrastructure projects. Talking about the future, the pace of demand is now expected to be normal compared to the rapid growth after Covid.
HSBC believes that the December quarter could be weak, especially due to falling prices in the eastern and southern regions. Cost pressures can also impact profits. A possible increase in the prices of Pet Coke may increase input costs. 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 increasing prices in major markets. Cement companies have increased prices in South and Eastern India in late December or early January or are likely to increase during January. Although it is not expected that all the announced price increases will be fully implemented, some of the increases will definitely have an impact.
