India: Cement output rises 8% in Q1 2026; Coal demand stays resilient

• Q1 cement production at 139.7 mnt – up 8% year-on-year
• March output at 48.4 mnt – up 4% y-o-y, exceeding seasonal average
• Industrial coal demand holds firm – despite power sector import decline

Indian cement production grew 8% year-on-year in the first quarter of 2026, reaching 139.7 million tonnes, according to latest data shared by ICRA. March output stood at 48.4 million tonnes, up 8% month-on-month and 4% year-on-year.

The Q1 figure represents an increase of 10 million tonnes compared with the same period last year, demonstrating resilience in industrial coal demand despite higher fuel costs.

Cement production reached 48.4 mnt in March 2026, growing by 4% year-on-year, while total production for Q1 2026 stood at 139.7 mnt, reflecting a stronger 8% y-o-y increase.

Coal demand implications

Cement is a major consumer of coal, both domestic and imported. The 8% growth in cement output indicates that industrial coal demand remains resilient even as power sector coal imports decline.

Cement producers typically blend petcoke and coal for kiln operations. However, with petcoke prices elevated due to the Middle East conflict, many cement makers have been switching to thermal coal – both domestic and imported.

Fuel switching supports coal

The cement sector’s growth comes at a time when power sector coal imports are falling. This suggests that coal demand is shifting from the power sector to industrial users.

Cement producers have been actively seeking alternatives to expensive petcoke. South African and US thermal coal have emerged as preferred options for many cement makers, supporting prices for mid-to-high CV coals.

Outlook

The 8% growth in cement output points to sustained industrial coal demand through 2026. While power sector imports may remain subdued, cement and other industrial users will continue to provide a floor for coal prices.

The ongoing fuel switch from petcoke to coal in the cement sector further supports thermal coal demand. Traders should monitor cement production trends as a key indicator of industrial coal consumption.