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Price trends in September

R-22 price rose to Rs299/kg (11.4% QoQ) in Q2FY23, but volumes were down 19% YoY to 2.6kte. In packaging film segment, spreads dipped QoQ for BOPET, while they improved for BOPP (BOPP spreads are helping SRF to protect packaging films' margin). The dip in BOPET spreads was expected due to new capacity expansion. Lauryl alcohol price dipped in Q2FY23 (Sep’22 to be precise) and is now at Rs191, down 17.5% QoQ; this should help Galaxy Surfactants see relatively better volumes on reducing cost pressures for FMCG companies. Rossari Biotech’s four key raw materials’ prices have started falling, while we are yet to see the benefits on margins. Pigment prices have marginally increased on QoQ basis; however, volumes have declined due to lower demand from plastic segment, which will continue to hurt Sudarshan. EPL should see a modicum of relief in margins due to decline in polymer price, which was down 7.8% QoQ. PTFE price increased to Rs967, up 3.4% QoQ / 24.2% YoY. PTFE volumes declined 16.0% YoY to 3.6kte. Other fluoropolymers’ price inflation was at 7.9% QoQ to Rs2,402, and volumes were up 85% YoY to 886te. Carbon black export price increased 12.1% QoQ to Rs139, which helped PCBL improve spreads; export volumes were up 12.8% YoY. For Clean Science, Guaiacol price rose by 11.8% QoQ to Rs382 while key RM phenol price was down 1% QoQ to Rs122.

SRF Ltd: BOPET spreads dipped while BOPP spreads remained strong

* R-22 price rose 11.4% QoQ (55.6% YoY) to Rs299 in Q2FY23. Fluorspar (acid spar) price was up 3.7% QoQ / 42.1% YoY to Rs38. R-22 spread (to fluorspar and chloroform) was Rs177 vs Rs139 in Q1FY23. R-22 price rose to Rs306, up 2.9% MoM, in Sep’22. Export volumes were down 19% YoY to 2.6kte. We are incrementally concerned about the rapid decline in R-22 export volumes, which could be structural; domestic market too may see a similar trend (basically, shift to HFC is happening faster than expected). Domestic R-22 is one of SRF’s most profitable products.

* MDC (methylene chloride) price declined 6.9% QoQ / rose 2.5% YoY to Rs55; methanol price dipped while chlorine price has increased. Our analysis suggests spread/margin in MDC for SRF should be lower as new capacity has been commissioned in India. MDC import volumes have declined by 66.3% YoY to 10kte.

* NTCF price was down 10.9% QoQ / up 32.8% YoY to Rs132 in Q2FY23. Caprolactam price rose 1.4% QoQ / 8.4% YoY to Rs177. NTCF-caprolactam spread was negative at Rs45 vs negative Rs26 in Q1FY23. Notably, NTCF import volumes dipped 34.7% YoY to 15kte.

* BOPET price fell 3.8% QoQ / rose 19.9% YoY to Rs162. PTA price was up 8.3% QoQ / 44.6% YoY to Rs82, and MEG price was down 14.3% QoQ and 11.5% YoY at Rs44. BOPET-PTA/MEG spread contracted 10.8% QoQ, but expanded 10.2% YoY to Rs77 (vs Rs86 in Q1FY23). MoM spread was down 7.4% at Rs71 in Sep’22.

* BOPP price dipped 8.8% QoQ / increased 6.6% YoY at Rs184 while polypropylene (PP) price was down 20.7% QoQ / 10.1% YoY to Rs87. BOPP-PP price spread expanded by 5.5% QoQ / 27.9% YoY at Rs97 (vs Rs92 in Q1FY23).

Chemplast Sanmar: VCM and EDC prices have dropped sharply in Q2FY23

* Paste PVC price increased 9.8% QoQ / 39.1% YoY to Rs166. Chemplast buys EDC for paste PVC, price of which has dipped 22.7% QoQ / 9.5% YoY to Rs48. Paste PVCEDC spread stood at Rs87 in Q2FY23 vs Rs49 in Q1FY23. EDC prices declined 24.9% MoM to Rs37 in Sep’22.

* Suspension PVC (S-PVC) price was down 13.2% QoQ / up 0.3% YoY to Rs99. VCM price dipped 28.1% QoQ / 12.5% YoY at Rs72. S-PVC-VCM spread was Rs27 in Q2FY23 vs Rs14 in Q1FY23. VCM prices have dropped 11.9% MoM to Rs63.

* MDC (methylene chloride) price fell 6.9% QoQ / up 2.5% YoY to Rs55; methanol price has dipped, while company produces its own chlorine. Our analysis suggests Chemplast spread for MDC is likely to be lower QoQ.

* Caustic soda price was down 4.9% QoQ / up 88.4% YoY to Rs57 (vs Rs60 in Q1FY23).

* Paste PVC import volumes rose 42.1% YoY to 4.4kte; S-PVC volumes jumped 27.4% YoY to 105kte.

Sudarshan Chemical (SCIL): Organic pigment export volumes shrink

* Organic pigment price rose 1.1% QoQ / 18.8% YoY to Rs663 in Q2FY23 vs Rs656 in Q1FY23. Organic pigments are inclusive of all colours including CPC. Export volumes were down 23.7% YoY at 24kte. Pigment segment faced a demand slowdown in Q2FY23 (especially for plastics segment), which has hurt export volumes.

* Azo pigment mixture prices declined 0.1% QoQ / rose 17.6% YoY to Rs545. Azo pigment mixture export volumes dipped 13.2% YoY to 12kte.

* Inorganic pigment price was down 5.9% QoQ / up 8.1% YoY to Rs113 vs Rs120 in Q1FY23.

Galaxy Surfactants (GSL): Lauryl alcohol price fell sharply

* Lauryl alcohol price stood at Rs191 (down 17.5% QoQ, up 19.5% YoY) vs Rs232 in Q1FY23. In Sep’22, price dipped 11.3% MoM to Rs168.

* Price of LAB (linear alkyl benzene), a petroleum-based surfactant, was up 8.2% QoQ / 29.3% YoY to Rs165.

Rossari Biotech: Input price inflation eases

* Rossari uses four key input materials – surfactants, acetic acid, acrylic acid and silicone oil.

* Price of lauryl alcohol, key basic raw material for surfactants, was Rs191 (down 17.5% QoQ / up 19.5% YoY) vs Rs232 in Q1FY23.

* Acetic acid price dipped 7.2% QoQ / 35.8% YoY to Rs50 in Q2FY23 (vs Rs54 in Q1FY23).

* Acrylic acid price fell 6.5% QoQ / up 33.7% YoY to Rs167 (vs Rs178 in Q1FY23). It dipped 15.8% MoM to Rs143 in Sep’22.

* Silicone oil price was down 11.4% QoQ / up 57.5% YoY to Rs475 in Q2FY23 (vs Rs536 in Q1FY23).

EPL Ltd: Dip in polymer price

* Price of LLDPE, a key input for laminates, was Rs98 (down 7.8% QoQ / up 14.6% YoY) vs Rs106 in Q1FY23. It was down 10.8% MoM to Rs92 in Sep’22.

Vinati Organics

* Ibuprofen price declined 1.3% QoQ and was flattish YoY at Rs1,144 (vs Rs1,159 in Q1FY23).

* IBB price rose 4.1% QoQ (22.3% YoY) to Rs198.

Atul Ltd

* 2,4-D price dropped 1.4% QoQ / increased 22.4% YoY to Rs264. Export volumes rose 8.8% YoY to 8.7kte.

* Paracresol price inflation was 3.8% QoQ and 60.5% YoY at Rs296. Export volumes dipped 38.1% YoY to 1.3kte.

* Epoxy price was down 1.2% QoQ and 8.2% YoY at Rs318. Export volumes dipped 3.8% YoY to 6.2kte.

* Resorcinol price rose 11.8% QoQ / 5.8% YoY to Rs833. Export volumes dipped 44.1% YoY to 181te.

Gujarat Fluorochemicals – PTFE price steadily rising

* PTFE price was up 3.4% QoQ / 24.2% YoY to Rs967 (vs Rs935 in Q1FY23). PTFE (to fluorspar) spread rose 3.4% QoQ and 22.5% YoY to Rs870 (vs Rs841 in Q1FY23). PTFE export volumes were down 16% YoY to 3.6kte.

* Other fluoropolymers (except PVDF) price rose 7.9% QoQ / 70.8% YoY to Rs2,402 (vs Rs2,226 in Q1FY23). Export volumes surged 85% YoY to 886te.

* R-22 price rose 11.4% QoQ / 55.6% YoY to Rs299. Fluorspar (acid spar) price was up 3.7% QoQ / 42.1% YoY to Rs38. R-22 spread (to fluorspar and chloroform) was Rs177 vs Rs139 in Q1FY23.

* Caustic soda price was down 4.9% QoQ / up 88.4% YoY to Rs57 (vs Rs60 in Q1FY23).

PCBL – carbon black export prices dipped in Sep’22

* Carbon black price was up 12.1% QoQ and 59.6% YoY to Rs139 (vs Rs124 in Q1FY23). Export volumes were up 12.8% YoY to 50kte. Price dipped 1.5% MoM to Rs139 in Sep’22.

Clean Science – Phenol price stabilised

* Guaiacol price was up 11.8% QoQ (down 39.2% YoY) to Rs382 (vs Rs342 in Q1FY23).

* Phenol price dipped 1% QoQ, but rose 22.3% YoY, to Rs122 (vs Rs123 in Q1FY23).

* Methanol price contracted 18.3% QoQ / 18% YoY to Rs24. Acetic anhydride price was down 6.6% / 15.2% YoY to Rs102.

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