Table of Contents Import and Export ScenarioIndustry Cost Breakdown in FY 2016-16 Growth in International Coal PricesAnnual Growth in Wholesale Cement PricesAu During fiscal 2016, sharp decline in real estate demand, floods in Tamil Nadu and decline in government expenditure led to a decline in the cement sector in this region. The Northern region has seen a decline in demand due to lack of rural demand and already accumulated real estate inventories. But huge government expenditure was witnessed in the North-Eastern states, supported by allocation of funds in the Union Budget. This has led to an increase in the demand for cement in this region. The demand for cement was affected after demonetization. This was also corroborated by reports of falling freight revenues for the railways. Indian Railways witnessed a significant impact on its revenue due to reduction in coal and cement traffic after demonetization. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay It is therefore possible to say that if demonetization had not been invoked, the growth would have been driven by the real estate segment following the announcements made regarding PMAY - rural and housing for all by 2022 , smart cities and various irrigation projects. Import and Export Scenario Cement imports into the country are almost negligible with adequate domestic supply. Nevertheless, 64% of our import demand in terms of quantity came from Pakistan in FY 2016. Imports increased from 1.095 million tonnes in FY 2011 to 1.35 million tonnes in of FY 2016. Exports, on the other hand, increased from 3.49 million tonnes in FY 2011 to 6.22 million tonnes in FY 2016. Rising input costs make margin pressure: Power, fuel and freight are the main cost components of the cement industry given that it is an energy and freight intensive industry. Electricity and fuel costs as well as transport/freight costs each contribute around 22-23% to the sector's overall cost of production. The margins of players are therefore sensitive to unfavorable changes in these input costs. It gives the cost structure of the industry based on the cost structure of a selected sample of 42 companies as of FY 2016. Breakdown of industry costs in FY 2016. Source : Ace Equity. the same increased during FY 2017. Additionally, the cement industry benefited during 4th and 4th quarters of FY 2016 and FY 2017 from low coal and coke prices of oil. However, coal prices have started to strengthen since July 2016. In addition, petroleum coke, which is an alternative to coal, has also seen a price increase since February 2016 (the price has increased by 78% since February 2016), mainly due to supply constraints as well as a high price level. request. Therefore, the ability of companies to pass on rising input costs would be crucial in order to maintain margins. Coal is mainly used as fuel in the cement manufacturing process. Around 0.12 to 0.14 tonnes of coal (excluding coal consumption in a captive power plant) is required for the production of one tonne of OPC. Due to limited availability and lower quality of coal, 8.