Chemical Sector Update - Chemical, Petrochemical Prices, Margins and Trends By Emkay Global
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Chemical, Petrochemical Prices, Margins and Trends
Price correction continues in Chemicals
Easing power crisis in China led to a correction in chemical prices in Oct’21, which also continued in Nov’21. Generally, prices across all chemicals have been falling WoW in Nov’21. Particularly, a substantial drop was seen in Methanol, Acetic Acid, and Acetone (12-21% decline), among others. Polymer prices fell primarily due to a decline in crude prices.
* ~41% MoM surge in Caustic Soda – Caustic prices peaked by mid-Nov’21 at USD900/MT and then declined sharply to settle at ~USD730/MT at month-end. However, domestic prices are still ruling at ~Rs60/kg; temporarily beneficial for Grasim, DCM Shriram, Meghmani Finechem, GACL, DCW and all the Caustic Soda players.
* ~16% MoM decline in MEG prices (at peak) – Negative for RIL, IOC and India Glycols
* ~34% MoM decline in PVC-VCM spreads – Negative for Chemplast Sanmar, DCM Shriram, DCW
* After an incessant price increase, China Glyphosate prices declined marginally in Nov’21 from the peak of CNY ~80,000/ MT to CNY ~79,500/ MT.
* China cumulative pesticide production during Jan-Oct’21 rose ~19% YoY, easing global availability; however, pricing remained elevated due to high input costs and a favorable demand environment.
* Soda Ash imports were down significantly by ~67% YoY in Sep’21 at ~31,700MT (~98,600MT).
* Phenol imports rose ~12% YoY during H1FY22 to ~88,900MT (~79,300MT).
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