R-22 price has risen to Rs 214 (up 11.6% QoQ) in Q3FY22-TD and the spreads are likely to be higher for SRF; margins for Navin Fluorine / GFL will rise even higher on soft chloroform prices. In the packaging films segment, spread has increased in BOPET but lower in BOPP. We don’t see packaging films trend to be a representative of the entire quarter due to volatility in prices and we will therefore wait for next two-months’ data to arrive at any conclusion.

NTCF import volumes continue to remain elevated probably on higher prices from domestic manufacturer, thus, long-term margins for technical textiles may not sustain at existing levels. Lauryl alcohol prices have remained stable in past two quarters and LAB price dipped marginally on QoQ basis but it has now caught-up with LA inflation on YoY basis. Rossari Biotech’s raw materials - acetic acid and surfactants prices dipped QoQ, but acrylic acid and silicone continue to rise sharply. Pigment prices have increased (good for Sudarshan Chemical), but it is to be seen how much of its raw material inflation will be passed on. EPL will continue to face challenges from rising polymer prices. Gujarat Fluorochemicals would benefit from rise in PTFE volumes and higher realisations.

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

SRF Ltd: R-22 prices hardening; packaging films spread volatile on RM inflation

• R-22 prices rose 11.6% QoQ (up 36.8% YoY) to Rs214 in Q3FY22-TD. Fluorspar (acid spar) prices were up 0.6% QoQ / down 9.2% YoY at Rs27. R-22 spread (to fluorspar and chloroform) was Rs117 vs Rs87 in Q2FY22. R-22 price was up 11.2% MoM in Oct’21.
• MDC (methylene chloride) prices dipped 3.1% QoQ / rose 56.9% YoY to Rs52; methanol prices rose slightly while chlorine prices have increased. Our analysis suggests spreads / margins in MDC for SRF should be slightly lower.
• NTCF prices were up 21.4% QoQ and down 15.3% YoY to Rs121 in Q3FY22-TD.
• Caprolactam was down 2.0% QoQ / 93.7% YoY at Rs160. NTCF-caprolactam spread was at negative Rs39 vs negative Rs64 in Q2FY22. Notably, NTCF import volumes have grown substantially to >6.7kte/month (average) in the past six months from 2kte/month in the preceding ten.
• BOPET prices expanded 8.2% QoQ / 31.9% YoY to Rs147. PTA rose 6.4% QoQ / 71.9% YoY to Rs60, and MEG prices were up 13.5% QoQ / 66.6% YoY at Rs56.
• BOPET-PTA/MEG were rose 8.2% QoQ / 8.8% YoY to Rs76 (vs Rs70 in Q2FY22). However, on MoM basis, spreads were up 7.1% to Rs76 in Oct’21.
• BOPP prices were up 1.9% QoQ / 26.8% YoY to Rs176 while polypropylene (PP) prices were up 11.6% QoQ / 57.6% YoY at Rs108. BOPP-PP price spread was down 10.4% QoQ / 3.3% YoY lower at Rs68.

Navin Fluorine (NFIL): R-22 spreads improved

R-22 prices rose 11.6% QoQ and 36.8% YoY to Rs214. Fluorspar (acid spar) prices were up 0.6% QoQ and down 9.2% YoY to Rs27. R-22 spread (to fluorspar and chloroform) was Rs117 vs Rs87 in Q2FY22. NFIL should be positively impacted from lower chloroform prices.

Chemplast Sanmar: PVC spreads lower

• Paste PVC prices were up 0.5% QoQ and 9.0% YoY to Rs120. Chemplast buys EDC for Paste PVC, which is up 11.1% QoQ / 121.6% YoY to Rs59. Paste PVC –EDC spread stood at Rs23 in Q3FY22-TD vs Rs32 in Q2FY22.
• Suspension PVC (S-PVC) prices rose 4.3% QoQ / 48.4% YoY to Rs103. VCM prices rose 20.3% QoQ / 41.3% YoY to Rs98. S-PVC and VCM spreads were at Rs4 in Q3FY22-TD vs 16 in Q2FY22.
• MDC (methylene chloride) prices dipped 3.1% QoQ / rose 56.9% YoY to Rs52; methanol prices rose slightly while chlorine prices have increased. Chemplast uses its own chlorine, thus, lower MDC prices and higher methanol prices mean lower spreads for Chemplast.
• Caustic soda price was up 57.4% QoQ / 109.4% YoY to Rs48 (vs Rs30 in Q2FY22).

Sudarshan Chemical (SCIL): Organic pigment realisation expanded 16.9% YoY

• Organic pigment prices rose 1.7% QoQ / 16.9% YoY to Rs568 in Q3FY22-TD vs Rs558 in Q2FY22. Organic pigments are inclusive of all colours including CPC. Their export volumes were down 17.3% YoY to 11.7kte in Q3FY22-TD.
• Azo pigment mixture prices dipped 1.0% QoQ, but up 17.7% YoY to Rs459 vs Rs463 in Q2FY22.
• Inorganic pigment prices rose 15.0% QoQ and 25.7% YoY to Rs120 vs Rs104 in Q2FY22.

Galaxy Surfactants (GSL): Lauryl alcohol prices stable

• Lauryl alcohol prices were Rs156, down 2.5% QoQ and rose 68.8% YoY, vs Rs160 in Q2FY22.
• LAB (linear alkyl benzene), a petroleum-based surfactant, price was down 1.8% QoQ / up 63.4% YoY to Rs125. 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 Rs156, down 2.5% QoQ and up 68.8% YoY, vs Rs160 in Q2FY22.
• Acetic acid prices dipped 15.2% QoQ / 143.9% YoY to Rs66 in Q3FY22-TD (vs Rs78 in Q2FY22). In Oct’21, the price was Rs66, down 5.1% MoM, which means inflation is easing in Q3FY22.
• Acrylic acid price has risen 19.5% QoQ / 101.7% YoY to Rs149 (vs Rs125). Acrylic acid was at Rs149 in Oct’21, up 16.5% MoM.
• Silicone oil prices were up by 21.1% QoQ and 71.8% YoY higher at Rs365 in Q3FY22-TD (vs Rs301 in Q2FY22).

EPL Ltd: Polymer prices rose in Oct’21

• LLDPE, a key input for laminates, prices were Rs94, up 9.7% QoQ and 42.2% YoY, vs Rs86 in Q2FY22. The price rose 8.2% MoM in Oct’21.

Vinati Organics

• Ibuprofen prices rose 6.9% QoQ, but dipped 37.6% YoY to Rs1,223 (vs Rs1,144 in Q2FY22).
• IBB prices dipped 0.1% QoQ (34.0% YoY) to Rs162.

Atul Ltd

• 2,4-D prices rose 9.5% QoQ and 52.4% YoY to Rs236.
• Para-Cresol prices increased 13.7% QoQ and 47.7% YoY to Rs210.
• Epoxy prices were up 1.3% QoQ and 92.7% YoY at Rs351.
• Resorcinol prices dipped 19.7% QoQ and 1.6% YoY to Rs632.

Gujarat Fluorochemicals

• PTFE prices were up 6.6% QoQ and 21.4% YoY to Rs830 (vs Rs779 in Q2FY22).
• PTFE (to fluorspar) spread expanded 7.1% QoQ and 25.3% YoY to Rs761 (vs Rs710 in Q2FY22).
• R-22 prices rose 11.6% QoQ and 36.8% YoY to Rs214. Fluorspar (acid spar) prices were up 0.6% QoQ and down 9.2% YoY to Rs27. R-22 spread (to fluorspar and chloroform) was Rs117 vs Rs87 in Q2FY22. GFL should be positively impacted from lower chloroform prices.
• Caustic soda price was up 57.4% QoQ / 109.4% YoY to Rs48 (vs Rs30 in Q2FY22).