R-22 price rose to Rs333/kg (+11.3% QoQ) in Q3FY23-TD, but volumes were down 34.3% YoY to 0.8kte. In packaging films segment, spreads have contracted QoQ for both BOPET and BOPP, which should incrementally put pressure on SRF’s packaging films margin. Lauryl alcohol price dipped in Q3FY23-TD to Rs153, down 19.9% QoQ; this should help Galaxy Surfactants improve its volumes as a result of reducing cost pressures for FMCG companies.

Rossari Biotech’s four key raw material prices have started falling, which should aid margin improvement. Pigment prices were down QoQ on low demand and volumes have declined due to lower consumption in the plastics segment; this will continue to hurt Sudarshan.

EPL should see some relief in margin pressures due to fall in polymer price (down 8.6% QoQ). PTFE price jumped 5.1% QoQ / 23.2% YoY to Rs1,017 while volumes fell 26.3% YoY to 0.85kte. Other fluoropolymer prices increased 2.6% QoQ, and volumes surged 236.4% YoY to 108te. Carbon black export price dipped 5.7% QoQ to Rs131 while export volumes were down 11.0% YoY. We expect Clean Science’s Q3FY23 margins to be helped by 2.1% QoQ rise in guaiacol price to Rs390, and 13.2% QoQ decline in phenol price to Rs106.

(Note: All prices are in Rs/kg; Q3FY23-TD data is only for Oct’22)

SRF Ltd: Packaging films spreads have contracted; R-22 price inflation continues

R-22 price jumped 11.3% QoQ (29.4% YoY) to Rs333 in Q3FY23-TD. Fluorspar (acid spar) price inched up by 1.7% QoQ / 33.9% YoY to Rs38. R-22 spread (to fluorspar and chloroform) was Rs202 vs Rs177 in Q2FY23. R-22 price rose to Rs333, up 8.6% MoM in Oct’22. Export volumes contracted 34.3% YoY to 0.8kte. We are incrementally concerned about the rapid decline in R-22 export volumes, which could be structural. The domestic market may have a similar trend (basically, shift to HFC is happening faster than expected). For now, price increase is completely offsetting volume declines.

MDC (methylene chloride) price fell 23.4% QoQ / 27.3% YoY to Rs42; methanol and chlorine prices have increased. Our analysis suggests spread/margin in MDC for SRF should be lower. MDC import volumes have fallen 53.1% YoY to 2.7kte. MDC prices were down 19.4% MoM to Rs42 in Oct’22.

NTCF price was up 3.1% QoQ / 2.3% YoY to Rs136 in Q3FY23-TD. Caprolactam price dipped 15.2% QoQ / 8.4% YoY to Rs150. NTCF-caprolactam spread was negative at Rs14 vs negative Rs45 in Q2FY23. Notably, NTCF import volumes shrank 50.9% YoY to 3.2kte.

BOPET price was down 12.8% QoQ / 5.5% YoY to Rs142. PTA price declined 14.2% QoQ / rose 13.2% YoY to Rs70, and MEG price was down 6.9% QoQ and 29.3% YoY at Rs41. BOPET-PTA/MEG spread contracted 12.6% QoQ and 12.4% YoY to Rs67 (vs Rs77 in Q2FY23). On MoM basis, spread contracted 5.0% at Rs67 in Oct’22.

BOPP price dipped 4.0% QoQ / 3.9% YoY to Rs176 while polypropylene (PP) price jumped 17.1% QoQ / fell 6.5% YoY to Rs102. BOPP-PP price spread contracted 23% QoQ / 0.2% YoY to Rs75 (vs Rs97 in Q2FY23).

Chemplast Sanmar: PVC import volumes have risen in Q3FY23-TD

Paste PVC price increased 26.9% QoQ / 68.9% YoY to Rs210. Chemplast buys EDC for paste PVC, price of which has plummeted 43.5% QoQ / 60.9% YoY to Rs27. Paste PVC-EDC spread stood at Rs166 in Q3FY23-TD vs Rs87 in Q2FY23. EDC prices fell 26.8% MoM to Rs27 in Oct’22.

Suspension PVC (S-PVC) price was down 18.8% QoQ / 28.9% YoY to Rs80. VCM price dipped 8.8% QoQ / 39.3% YoY to Rs65. S-PVC-VCM spread was Rs15 in Q3FY23-TD vs Rs27 in Q2FY23. VCM prices rose 4.3% MoM to Rs65.

MDC (methylene chloride) price dipped 23.4% QoQ / 27.3% YoY to Rs42 while methanol and chlorine prices have increased. Our analysis suggests Chemplast spread for MDC is likely to be lower QoQ.

Caustic soda price was up 2.7% QoQ / 14.7% YoY to Rs58 (vs Rs57 in Q2FY23).

Paste PVC import volumes rose 18.2% YoY to 1.1kte; S-PVC volumes were up 20.5% YoY to 39.6kte.

Sudarshan Chemical (SCIL): Organic pigment export volumes shrink

Organic pigment price fell 6.4% QoQ / rose 5.4% YoY to Rs621 in Q3FY23-TD vs Rs663 in Q2FY23. Organic pigments are inclusive of all colours including CPC. Export volumes were down 45.0% YoY at 6.4kte. There has been a slowdown in demand for pigments (particularly for plastics segment), which has hurt export volumes.

Azo pigment mixture price was down 5.6% QoQ / up 8.2% YoY to Rs514 while its export volumes fell 32.3% YoY to 3.5kte.

Inorganic pigment price was up 9.6% QoQ / 12.2% YoY to Rs124 vs Rs113 in Q2FY23.

Galaxy Surfactants (GSL): Lauryl alcohol prices fell sharply

Lauryl alcohol price stood at Rs153, down 19.9% QoQ and 2.4% YoY, vs Rs191 in Q2FY23. In Oct’22, price dipped 8.8% MoM to Rs153.

Price of LAB (linear alkyl benzene), a petroleum-based surfactant, was down 8.9% QoQ, but up 15.3% YoY to Rs150.

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 Rs153, down 19.9% QoQ / 2.4% YoY, vs Rs191 in Q2FY23.

Acetic acid price dipped 16.9% QoQ / 45.9% YoY to Rs41 in Q3FY23-TD (vs Rs50 in Q2FY23) and was down 10.5% MoM at Rs41 in Oct’22.

Acrylic acid price fell 31.3% QoQ / 31.0% YoY to Rs115 (vs Rs167 in Q2FY23). It was down 19.7% MoM at Rs115 in Oct’22.

Silicone oil price was up 5.8% QoQ / 19.6% YoY to Rs502 in Q3FY23-TD (vs Rs475 in Q2FY23).

EPL Ltd: Decline in polymer price

Price of LLDPE, a key input for laminates, was Rs90, down 8.6% QoQ / 8.4% YoY, vs Rs98 in Q2FY23. It dipped 2.2% MoM to Rs90 in Oct’22.

Vinati Organics

Ibuprofen price rose 15.0% QoQ / 10.6 YoY to Rs1,315 (vs Rs1,144 in Q2FY23).

IBB price was up 3.3% QoQ (20.6% YoY) to Rs205.

Atul Ltd

2,4-D price dipped 0.2% QoQ / increased 4.6% YoY to Rs264. Export volumes shrank 4.2% YoY to 3.1kte.

Paracresol price inflation was 0.2% QoQ and 17.1% YoY at Rs297. Export volumes were down 69.6% YoY to 0.3kte.

Epoxy price was down 14.0% QoQ and 23.6% YoY at Rs274. Export volumes dipped 6.1% YoY to 2.2kte.

Resorcinol price rose 8.0% QoQ / 40.2% YoY to Rs900. Export volumes contracted 83.7% YoY to 23te.

Gujarat Fluorochemicals – PTFE price continues to be strong

PTFE price was up 5.1% QoQ / 23.2% YoY to Rs1,017 (vs Rs967 in Q2FY23). PTFE (to fluorspar) spread rose 5.5% QoQ and 22.2% YoY to Rs918 (vs Rs870 in Q2FY23). PTFE export volumes were down 26.3% YoY to 0.9kte.

Other fluoropolymers (except PVDF) price rose 2.6% QoQ / 39.8% YoY to Rs2,464 (vs Rs2,402 in Q2FY23). Export volumes surged 236.4% YoY to 362te.

R-22 price rose 11.3% QoQ / 29.4% YoY to Rs333. Fluorspar (acid spar) price was up 1.7% QoQ / 33.9% YoY to Rs38. R-22 spread (to fluorspar and chloroform) was Rs202 vs Rs177 in Q2FY23.

Caustic soda price rose 2.7% QoQ / 14.7% YoY to Rs58 (vs Rs57 in Q2FY23).

PCBL – carbon black export prices dipped in Oct’22

Carbon black price was down 5.7% QoQ, but up 49.1% YoY to Rs131 (vs Rs139 in Q2FY23). Export volumes were down 11.0% YoY to 14.8kte. Price dipped 5.9% MoM to Rs131 in Oct’22.

Clean Science – Phenol price decline will aid margins

Guaiacol price was up 2.1% QoQ and 14.5% YoY to Rs390 (vs Rs382 in Q2FY23).

Phenol price dipped 13.2% QoQ and 0.2% YoY to Rs106 (vs Rs122 in Q2FY23).

Methanol price rose 6.7% QoQ / fell 26% YoY to Rs26. Acetic anhydride price was up 3.8% / down 9.5% YoY to Rs106.