Cement Shares Drop Precipitously
The shares in cement firms dropped precipitously on Wednesday, after the government’s trashing some duties to help imports and rein in domestic prices.
According to the analysts, the late Tuesday decision of the government to abolish countervailing duty of 16% and additional customs duty of 4% on portland cement would not boost imports, but the move added to negative sentiment for shares in cement companies already hit by government pressure to curb prices. The analysts opined that the high transportation costs and poor infrastructure at the ports to handle bulk cement would hinder imports.
The shares in ACC Ltd, India's second-biggest cement producer at 11:08 am, were down 1.7% at Rs 693 after falling as low as Rs 680 in a firm Mumbai market that was up more than 1 %. Gujarat Ambuja was down 2.7 % at Rs 102.55, while Grasim Industries fell 1.9 % to Rs 2,065.
The government has been urging cement makers to roll back prices to douse inflation, but producers have not fallen in line though they have agreed to hold prices for one year. The government had removed a 12.5 % import duty on cement in January.