# Cement Prices Rise as West Asia Conflict Drives Fuel Inflation Manufacturers increase retail prices to offset surging coal and petcoke costs amid steady demand. - **Source:** [mint - industry](https://www.livemint.com/rss/industry) - **Published:** 2026-11-02 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/3f879d30-e311-421f-a0c0-ff113e87dfa4 ## Conflict Impacts Production Costs The ongoing conflict in West Asia has triggered significant volatility in global energy markets, directly inflating production costs for Indian cement manufacturers. Coal and petcoke, essential components for cement production, have seen prices climb, with petcoke rising from $160 per tonne in March to $188 per tonne by October. ## Strategic Price Adjustments Major manufacturers including UltraTech, Ambuja Cements, and Dalmia Bharat initiated price hikes during September and October to protect profit margins. These increases follow a period of relative stability earlier in the fiscal year, serving as a necessary mechanism to mitigate the impact of rising power and fuel expenses on bottom-line profitability. ## UltraTech Financial Performance UltraTech Cement reported a 24% year-on-year increase in fuel and power expenses, reaching ₹5,511 crore. Management noted that fuel costs per bag rose to ₹51.50 from ₹45. Consequently, the company implemented trade price increases of ₹7-10 per bag in late September to recover these elevated operational costs from the market. ## Shree Cement Margin Pressure Shree Cement experienced an 18% growth in domestic sales volumes, yet profitability faced headwinds as costs outpaced revenue gains. Consolidated Ebitda per tonne declined to ₹966 from ₹1,055 a year earlier. The company’s power and fuel expenses surged by 56%, highlighting the difficulty of maintaining unit economics during periods of high inflation. ## Fiscal Year Pricing Trends Cement companies have adjusted prices three times this fiscal year to manage cost fluctuations. After an initial hike in April and a stable period during the monsoon, companies raised prices by ₹5-8 per bag in September and an additional ₹10-12 per bag in October to offset sustained energy and fuel cost pressures. ## Demand Drivers and Outlook Despite price hikes, demand remains resilient, supported by infrastructure spending in roads, railways, and data centers. Analysts expect demand growth to reach 7-8% by FY27. However, the ability of manufacturers to sustain these price levels depends on regional supply-demand dynamics and the competitive intensity observed across different Indian market segments. ## Operational Cost Pass-Through Industry leaders emphasize that price increases are a direct response to structural changes in production costs. Executives from Ambuja Cements and UltraTech suggest that further progressive hikes may occur if input costs remain beyond reasonable levels. This strategy aims to ensure that end customers eventually bear the burden of sustained global energy inflation. ## Future Profitability Expectations The industry faces the immediate challenge of converting recent price hikes into long-term margin recovery. While higher input costs persist, companies anticipate better realizations in the December quarter. Ratings agency Crisil projects that prices could return to ₹300-305 levels by FY27, potentially reaching a four-year high for the domestic cement sector. ## Sources covering this story - https://www.livemint.com/industry/cement-price-hike-india-fuel-costs-gulf-war-11793588752361.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._