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Capacity utilisation - cement (pricing threshold)
What it is
Cement pricing power depends on capacity utilisation crossing roughly 80-85%; below that, producers compete for volume and prices stay flat. Industry utilisation has run around 70-72% against capacity near 655 mtpa
Regional imbalances matter more than the national average because freight limits how far cement travels
Impact on industries
- Utilisation below the pricing threshold means volume growth does not convert into price - FY26 saw flat prices as companies chose volume over realisation
- Southern India runs at roughly 60-62% utilisation, so regional oversupply persists even where national demand is strong
- Demand growth of 6-7.5% against slower capacity addition gradually closes the gap, and leaders already operate near 89% utilisation
- Consolidation has strengthened regional oligopolies and pricing discipline, but transport economics keep cement regional so national figures conceal local dynamics