Costs to pinch cement firms in Q1

The early onset of the monsoon plays spoilsport for cement demand and prices.

- Harsha Jethmalani

Also, a temporary rise in power and fuel (P&F) costs is on the cards for cement makers in Q1FY26. The cost of imported petroleum coke (petcoke) saw a sudden spike in March. A surge in demand by Chinese companies in anticipation of higher tariffs led to pre-booking, which translated into higher procurement costs.

P&F costs are estimated at 30-35% of the cement sector's total production cost. Petcoke, which is derived from oil refining, is a key input material for cement manufacturers. Typically, cement companies import petcoke and stock fuel inventories for two to three months. So, the impact on profitability due to movement in fuel costs comes with a lag. Although spot international petcoke cost has now cooled off to $104/tonne from $122/tonne in March, cement companies with a relatively higher reliance on this fuel could feel the heat in Q1FY26.