Crude oil correction may ease cement costs, El Nino threatens demand recovery
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Lower crude oil prices may soon ease fuel costs for cement companies.
- ✓Motilal Oswal said, "We expect the correction in crude oil prices to moderate petcoke prices with a lag." However, El Nino, uneven rainfall, and construction bans threaten demand recovery, keeping the sector's growth prospects uncertain in the near term.
Story at a Glance
- Category
- Indian Markets
- Reported By
- Financial Express
- Reading Speed
- 4 Minute(s)
- Market Focus
- India Economy
See how lower crude may ease cement fuel costs while El Nino, rain gaps and construction bans threaten demand recovery and margins.
However, weather-related disruptions, including deficient rainfall, labour migration and temporary construction bans, could weigh on demand and delay the sector's recovery, according to Motilal Oswal.
Here is how crude price fluctuations and EL Nino climate phenomena may impact the cement industry.
Crude oil correction may ease fuel cost pressure
Crude oil prices could eventually bring down petcoke and coal prices, offering relief to cement companies. Petcoke is a by-product of crude oil refining, which creates a natural link between crude and petcoke prices. Petcoke is used in the cement industry as a fuel to fire rotary kilns during the production of cement clinker. As crude prices decline, petcoke prices are also expected to follow. However, the benefits are likely to reach manufacturers with a lag, keeping input costs elevated in the near term.
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