Price trend of specialty chemicals in Nov 21

Pigment prices have increased but it is to be seen how much of its raw material inflation is passed on.

R-22 prices rose to Rs 246 (up 28.0% QoQ) in Q3FY22-TD catching up with inflation in other ref-gases, which will benefit SRF, Navin Fluorine and Gujarat Fluorochemicals (GFL). In the packaging film segment, spread has increased for BOPET but has been lower for BOPP.

NTCF import volumes remain elevated probably on higher prices from domestic manufacturers; hence, long-term margins for technical textiles may not sustain at existing levels. Lauryl alcohol prices have slightly dipped in past two quarters and LAB prices declined marginally QoQ, but it has now caught up with LA inflation YoY. Inflation in Rossari Biotech’s four key raw materials will keep company margins under pressure.

Pigment prices have increased but it is to be seen how much of its raw material inflation is passed on. EPL will continue to face challenges from rising polymer prices. GFL would benefit from rise in PTFE volumes and higher realisations. PCBL has seen higher export volumes for carbon black.

(Note: All prices stated are in Rs/kg; Q3FY22-TD numbers are for Oct’21 and Nov’21)

SRF Ltd: R-22 prices hardening; packaging film spread firm

• R-22 prices rose 28.0% QoQ (up 56.9% YoY) to Rs246 in Q3FY22-TD. Fluorspar (acid spar) prices were up 7.1% QoQ / down 3.5% YoY at Rs28. R-22 spread (to fluorspar and chloroform) was Rs145 vs Rs87 in Q2FY22. R-22 prices are up 31.4% MoM to Rs282 in Nov’21. Export volumes have dipped 22% YoY to 2.9kte.
• MDC (methylene chloride) prices dipped 0.1% QoQ / rose 61.8% YoY to Rs53; methanol prices rose sharply while chlorine prices have increased moderately. Our analysis suggests spreads / margins in MDC for SRF should be lower.
• NTCF prices were up 32.7% QoQ, down 7.4% YoY, to Rs132 in Q3FY22-TD. Caprolactam was down 1.2% QoQ / up 95.3% YoY at Rs161. NTCF-caprolactam spreads were at a negative Rs30 vs negative Rs64 in Q2FY22. Notably, NTCF import volumes have grown 35% YoY to 10.9kte.
• BOPET prices grew 9.2% QoQ / 33.0% YoY to Rs148. PTA rose 8.1% QoQ / 74.6% YoY to Rs61, and MEG prices were up 20.4% QoQ / 76.6% YoY at Rs59. BOPETPTA/MEG spreads were up 7.2% QoQ / 7.8% YoY to Rs75 (vs Rs70 in Q2FY22). However, on MoM basis, spreads were down 1.8% to Rs74 in Nov’21.
• BOPP prices were 5.0% QoQ / 30.6% YoY higher at Rs181 while polypropylene (PP) prices were up 13.8% QoQ / 60.6% YoY at Rs110. BOPP-PP price spread was down 6.2% QoQ / up 1.3% YoY at Rs71.

Navin Fluorine (NFIL): R-22 spreads improved

• R-22 prices rose 28.0% QoQ, 56.9% YoY, to Rs246. Fluorspar (acid spar) prices were up 7.1% QoQ, down 3.5% YoY, to Rs28. R-22 spread (to fluorspar and chloroform) was Rs145 vs Rs87 in Q2FY22. NFIL should be positively impacted from lower chloroform prices.

Chemplast Sanmar: PVC spreads lower

• Paste PVC prices were up 0.4% QoQ and 8.9% YoY to Rs120. Chemplast buys EDC for paste PVC, which is up 25.1% QoQ / 149.5% YoY, to Rs66. Paste PVC -EDC spread stood at Rs10 in Q3FY22-TD vs Rs32 in Q2FY22.
• Suspension PVC (S-PVC) prices rose 10.2% QoQ / 56.7% YoY to Rs108. VCM prices increased 29.1% QoQ / 51.6% YoY to Rs106. S-PVC-VCM spreads were at Rs3 in Q3FY22-TD vs 16 in Q2FY22.
• MDC (methylene chloride) prices dipped 0.1% QoQ / rose 61.8% YoY to Rs53; methanol prices rose sharply while chlorine prices have increased moderately. Chemplast uses its own chlorine, hence lower / flattish MDC prices and higher methanol prices mean lower spreads for Chemplast.
• Caustic soda price was up 69.4% QoQ / 125% YoY to Rs51 (vs Rs30 in Q2FY22).

Sudarshan Chemical (SCIL): Organic pigment realisation expanded 17.5% YoY

• Organic pigment prices rose 2.2% QoQ / 17.5% YoY to Rs571 in Q3FY22-TD vs Rs558 in Q2FY22. Organic pigments are inclusive of all colours including CPC. Their export volumes were up 6% YoY to 20.9kte in Q3FY22-TD.
• Azo pigment mixture prices increased 4.1% QoQ / 23.7% YoY to Rs482 vs Rs463 in Q2FY22.
• Inorganic pigment prices rose 7.4% QoQ / 17.4% YoY to Rs112 vs Rs104 in Q2FY22.

Galaxy Surfactants (GSL): Lauryl alcohol prices slightly dipped

• Lauryl alcohol prices were at Rs155, down 3.1% QoQ, but rose 67.3% YoY, vs Rs160 in Q2FY22.
• LAB (linear alkyl benzene), a petroleum-based surfactant, price was down 0.5% QoQ / up 65.6% YoY to Rs127. Inflation in petroleum-based surfactants has caught-up with LA on YoY basis.

Rossari Biotech: Input material prices remain elevated

• Rossari has four key input raw materials – surfactants, acetic acid, acrylic acid, and silicone oil.
• Lauryl alcohol, key basic raw material for surfactants, prices were Rs155, down 3.1% QoQ but up 67.3% YoY, vs Rs160 in Q2FY22.
• Acetic acid prices dipped 10.1% QoQ / rose 158.4% YoY to Rs70 in Q3FY22-TD (vs Rs78 in Q2FY22). In Nov’21, the price was Rs74, up 12.8% MoM, which means inflation accelerated again in Q3FY22.
• Acrylic acid prices have risen 25.8% QoQ / 112.3% YoY to Rs157(vs Rs125).
• Acrylic acid was at Rs164 in Nov’21, up 9.9% MoM.
• Silicone oil prices were up by 31.0% QoQ and 85.9% YoY higher at Rs395 in Q3FY22-TD (vs Rs301 in Q2FY22).

EPL Ltd: Polymer prices rose again in Nov’21

• Prices of LLDPE, a key input for laminates, were at Rs96, up 12.1% QoQ / 45.3% YoY, vs Rs86 in Q2FY22. Prices rose 4.5% MoM to Rs98 in Nov’21.

Vinati Organics

• Ibuprofen prices rose 8.3% QoQ, but dipped 36.8% YoY, to Rs1,239 (vs Rs1,144 in Q2FY22).
• IBB prices rose by 2.8% QoQ (37.8% YoY) to Rs167.

Atul Ltd

• 2,4-D prices rose 12.0% QoQ and 55.9% YoY to Rs242. Export volumes rose 77.4% YoY to 5.3kte in Q3FY22-TD.
• Paracresol prices increased 29.5% QoQ and 68.2% YoY to Rs239. Export volumes rose 19.8% YoY to 1.9kte in Q3FY22-TD.
• Epoxy prices were up 3.2% QoQ and 96.1% YoY at Rs357. Export volumes rose 52.4% YoY to 4.2kte in Q3FY22-TD.
• Resorcinol prices dipped 18.4% QoQ and were flattish YoY at Rs643. Export volumes fell 45.5% YoY to 323te in Q3FY22-TD.

Gujarat Fluorochemicals

• PTFE prices were up 5.7% QoQ and 20.4% YoY to Rs823 (vs Rs779 in Q2FY22). PTFE (to fluorspar) spread expanded 5.5% QoQ and 23.4% YoY to Rs749 (vs Rs710 in Q2FY22). PTFE export volumes were up 33.3% YoY to 2.3kte.
• R-22 prices rose 28.0% QoQ and 56.9% YoY to Rs246. Fluorspar (acid spar) prices were up 7.1% QoQ and down 3.5% YoY to Rs28. R-22 spread (to fluorspar and chloroform) was Rs145 vs Rs87 in Q2FY22. GFL should be positively impacted from lower chloroform prices.
• Caustic soda prices were up 69.4% QoQ / 125.3% YoY to Rs51 (vs Rs30 in Q2FY22).

PCBL

• Carbon black prices were up 0.1% QoQ and 47.1% YoY to Rs87 (vs Rs87 in Q2FY22). Carbon black export volumes were up 25.6% YoY to 31.9kte.