R-22 prices dipped slightly to Rs242/kg (down 5.8% QoQ / up 36.4%) in Q4FY22, but volumes were down 34% YoY to just 3.7kte, which suggests pressure on prices will continue. This means SRF’s ref-gas revenue and EBIT margin benefits are coming entirely from the HFC portfolio. Some volume impact is due to shutdown of Gujarat Fluorochemicals’ (GFL) plant, but we are not worried as companies sell their entire quota allocated for full year. In the packaging film segment, spreads have increased for both BOPET and BOPP. This is despite anticipation of spreads contracting due to new capacity expansion. We expect higher margins to continue helping SRF’s domestic packaging film business.

Lauryl alcohol price rose again in Mar’22 and is now at Rs191, up 21.5% QoQ. Inflation in Rossari Biotech’s four key raw materials has kept the company’s margins under pressure. Pigment prices have increased (good for Sudarshan Chemical) on QoQ basis, but RM inflation looks far steeper. EPL will continue to face challenges due to elevated polymer prices. PTFE prices have risen 14.0% YoY to Rs941, in line with GFL commentary on price increase. PTFE volumes grew 5.3% YoY in Q4FY22. Carbon black export prices were high due to RM inflation; spreads have been stable but expected to improve soon.

(Note: All prices are in Rs/kg)

SRF Ltd: R-22 prices slightly down; packaging film spreads strong

R-22 prices declined 5.8% QoQ (up 36.4% YoY) to Rs242 in Q4FY22. Fluorspar (acid spar) prices were up 7.8% QoQ / 8.3% YoY at Rs31. R-22 spread (to fluorspar and chloroform) was at Rs128 vs Rs150 in Q3FY22. R-22 prices dipped to Rs240, down 1.7% MoM, in Mar’22. Export volumes fell 34% YoY to 3.7kte.MDC (methylene chloride) prices rose 17.3% QoQ / 72.6% YoY to Rs68; methanol and chlorine prices dipped. Our analysis suggests spreads / margins in MDC for SRF should be higher.NTCF prices were up 44.9% QoQ / 9.7% YoY to Rs193 in Q4FY22. Caprolactam dipped 3.6% QoQ / rose 38.5% YoY at Rs158. NTCF-caprolactam spreads were Rs35 vs negative Rs31 in Q3FY22. Notably, NTCF import volumes shrank 8.6% YoY to 5.7kte.BOPET prices grew 5.1% QoQ / 32.1% YoY to Rs157. PTA dipped 8.0% QoQ / rose 36.1% YoY to Rs57, and MEG prices were down 15.2% QoQ / up 10.7% YoY at Rs49. BOPET-PTA/MEG spreads increased 19.4% QoQ / 34.6% YoY to Rs92 (vs Rs77 in Q3FY22). On MoM basis, spreads expanded 6.8% to Rs97 in Mar’22.BOPP price inflation was 2.6% QoQ / 25.7% YoY at Rs188 while polypropylene (PP) prices were down 14.1% QoQ / up 4.4% YoY at Rs93. BOPP-PP price spreads were up 26.9% QoQ / 57.3% YoY at Rs95.

Navin Fluorine (NFIL): R-22 spreads moderate

R-22 prices dipped 5.8% QoQ / rose 36.4% YoY to Rs242. Fluorspar (acid spar) prices were up 7.8% QoQ / 8.3% YoY to Rs31. R-22 spread (to fluorspar and chloroform) was Rs128 vs Rs150 in Q3FY22. NFIL will be negatively impacted due to QoQ rise in chloroform prices.

Chemplast Sanmar: PVC spreads improve

Paste PVC prices increased 17.7% QoQ and 30.1% YoY to Rs147. Chemplast buys EDC for paste PVC, price of which is down 8.6% QoQ / up 54.1% YoY to Rs63. Paste PVC-EDC spread stood at Rs42 in Q4FY22 vs Rs10 in Q3FY22.Suspension PVC (S-PVC) prices rose 2.2% QoQ / 57.6% YoY to Rs115. VCM prices dipped 9.7% QoQ / rose 17.3% YoY at Rs97. S-PVC-VCM spreads were Rs18 in Q4FY22 vs Rs5 in Q3FY22.MDC (methylene chloride) prices rose 17.3% QoQ / 72.6% YoY to Rs68; methanol and chlorine prices have dipped. Our analysis suggests Chemplast spreads for MDC rose QoQ.Caustic soda prices were up 3.5% QoQ / 117.9% YoY to Rs53 (vs Rs51 in Q3FY22).Paste PVC import volumes dipped 35.1% YoY to 3.5kte; S-PVC volumes declined 24.9% YoY to 97kte.

Sudarshan Chemical (SCIL):

Organic pigment realisation expanded 23.4% YoY  Organic pigment prices rose 6.6% QoQ / 23.4% YoY to Rs627 in Q4FY22 vs Rs589 in Q3FY22. Organic pigments are inclusive of all colours including CPC. Their export volumes were down 6.5% YoY at 33kte. However, prices dipped 0.7% MoM to Rs630 in Mar’22.

Azo pigment mixture prices increased 10.1% QoQ / 28.2% YoY to Rs523 vs Rs476 in Q3FY22.Inorganic pigment prices were up 3.6% QoQ / 14.6% YoY to Rs114 vs Rs110 in Q3FY22.

Galaxy Surfactants (GSL): Lauryl alcohol prices hardened in Q4FY22

Lauryl alcohol prices were Rs191, up 21.5% QoQ and 56.0% YoY, vs Rs157 in Q3FY22. The rise in Mar’22 was 6.1% MoM to Rs207.Prices of LAB (linear alkyl benzene), a petroleum-based surfactant, were up 0.4% QoQ / 48.7% YoY to Rs131.

Rossari Biotech: Input material prices remained elevated

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, up 21.5% QoQ / 56.0% YoY, vs Rs157 in Q3FY22.Acetic acid prices dipped 9.7% QoQ / rose 51.8% YoY to Rs69 in Q4FY22 (vs Rs77 in Q3FY22). In Mar’22, the price was Rs61, down 9.4% MoM.Acrylic acid prices rose 5.6% QoQ / 87.2% YoY to Rs176 (vs Rs166 in Q3FY22). Price was Rs173 in Mar’22, down 1.0% MoM.Silicone oil prices were 12.1% QoQ and 98.2% YoY higher at Rs471 in Q4FY22 (vs Rs420 in Q3FY22).

EPL Ltd: Polymer prices were steady

Prices of LLDPE, a key input for laminates, were Rs99, up 0.7% QoQ / 32.7% YoY, vs Rs99 in Q3FY22. It rose 1.1% MoM to Rs98 in Mar’22.

Vinati Organics

Ibuprofen prices dipped 16.8% QoQ / 54.4% YoY to Rs990 (vs Rs1,189 in Q3FY22).IBB prices rose 1.4% QoQ (36.8% YoY) to Rs172.

Atul Ltd

2,4-D prices rose 18.1% QoQ and 80.5% YoY to Rs298. Export volumes grew 26.4% YoY to 9.6kte in Q4FY22.Paracresol price inflation was 6.6% QoQ and 82.4% YoY at Rs271. Export volumes dipped 4.8% YoY to 3.2kte in Q4FY22.Epoxy prices were down 9.7% QoQ and up 32.9% YoY at Rs323. Export volumes rose 18% YoY to 7.4kte in Q4FY22.Resorcinol prices rose 8.6% QoQ and 5.0 YoY at Rs697. Export volumes rose 86% YoY to 654te in Q4FY22.

Gujarat Fluorochemicals – PTFE prices rose sharply

PTFE prices were up 14.0% QoQ and 35.8% YoY to Rs941 (vs Rs826 in Q3FY22). PTFE (to fluorspar) spread expanded 14.6% QoQ and 39.1% YoY to Rs861 (vs Rs751 in Q3FY22). PTFE export volumes were up 5.3% YoY to 3.5kte.R-22 prices dipped 5.8% QoQ / rose 36.4% YoY to Rs242. Fluorspar (acid spar) prices were up 7.8% QoQ and 8.3% YoY to Rs31. R-22 spread (to fluorspar and chloroform) was Rs128 vs Rs150 in Q3FY22. GFL will be negatively impacted from higher chloroform prices QoQ.Caustic soda prices were up 3.5% QoQ / 117.9% YoY to Rs53 (vs Rs51 in Q3FY22).

PCBL

Carbon black prices were up 9.9% QoQ and 36.7% YoY to Rs96 (vs Rs88 in Q3FY22). Export volumes were up 38.4% YoY to 53kte in Q4FY22. Price increased 6.8% MoM to Rs102 in the month of Mar’22.

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