The price of a 50-kg bag of cement may go up by as much as Rs 9 this month as the new coal pricing mechanism adopted by Coal India has increased the production cost for makers of the building material, Crisil Research said today.

"Cement players will try to pass on the cost increase resulting from the new pricing policy adopted by Coal India, with effect, January 1, 2012. Hence, we believe that pan-India cement price is likely to rise by 2-3 per cent in January, 2012," said Crisil Research Head Ajay D'Souza.

The average price of a 50kg bag of cement fell by 1 per cent in December in comparison with November to Rs 285, despite strong 13.4 per cent growth in demand of the corresponding month last year to 20 million tonnes.

"The improved pace of construction activity would also support demand growth during the month, aiding price rise," D'Souza added.

During the April-December period of the current fiscal, the country's cement consumption grew by 5.9 per cent to 160.3 million tonnes from 151.4 million tonnes in the same period last fiscal.

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