The real estate sector, which consumes around 60% of the total demand, is under pressure since second half of last year and continues to do so. It has affected the overall demand of the cement. A score of projects are lying in initial stages and the construction has been stalled in and around all major cities of the country. Sustained demand will help absorb the additional supply in the year. The Union Budgets thrust in infrastructure development, encouragement of Public Private Partnership in various small, medium and large projects coupled with the demand for low cost housing in tier II and tier III cities will absorb the supply of cement .
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It might for a considerable period because of the onset of monsoons, where most of the building and construction activity slows down to a great extent, including the high spend highway projects in various states that would have to be halted due to flooding or unviability of working in such conditions.
Cement companies have been facing a serious problem for more than two years ever since the recession took its toll on all major spends, in the same way as steel companies suffered.
Of course, it does not augur well for the cement industries but then there is nothing much that can be done. Building or the realty sector should start looking up but any major activity would come only around from October.