R-22 price rose to Rs295/kg (10.1% QoQ / 53.7% YoY) in Q2FY23-TD, but volumes were down 23% YoY to 1.8kte. The volume drop is concerning as it could be an accelerated decline in demand for R-22, which can spill to domestic market.

Domestic R-22 is a highly profitable product. In packaging film segment, spreads have dipped QoQ for BOPET, while they have improved for BOPP (BOPP spreads are helping SRF in protecting packaging films margin). BOPET spread dip was expected due to new capacity expansion. Lauryl alcohol price dipped in Q2FY23 (Aug’22) and is now at Rs206, down 11% QoQ. This should relatively help Galaxy Surfactants see better volumes on reducing cost pressure for FMCG companies.

Rossari Biotech’s four key raw materials’ prices have started falling which will aid in margin improvement. Pigment prices have marginally increased on a QoQ basis; however, volume has declined due to lower demand from plastic segment, which will continue to hurt Sudarshan.

EPL should see a relief in margins led by a decline in polymer price, which was down 2.9% QoQ. PTFE price increased at Rs963, up 3.0% QoQ / 23.7% YoY. PTFE volumes declined 18.5% YoY to 2.3kte. Carbon black export price increased 12% QoQ to Rs138, which will help PCBL improve spread; export volumes were down 2.6% YoY.

(Note: All prices are in Rs/kg; and Q2FY23-TD data is only for July and August’22)

SRF Ltd: BOPET spreads dip while BOPP spreads remain strong

R-22 price rose 10.1% QoQ (53.7% YoY) to Rs295 in Q2FY23-TD. Fluorspar (acid spar) price was up 3.8% QoQ / 42.3% YoY to Rs38. R-22 spread (to fluorspar and chloroform) was Rs174 vs Rs139 in Q1FY23. R-22 price rose to Rs298, up 1.5% MoM in Aug’22. Export volumes were down 22.6% YoY to 1.8kte. We are incrementally concerned on the accelerated exports volume decline in R-22 which could be structural; domestic market may have a similar trend (basically shift to HFC is faster than expected). Domestic R-22 is one of the most profitable products.

MDC (methylene chloride) price dipped 5.2% QoQ / up 4.5% YoY to Rs56; methanol price has 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 dipped by 43.7% YoY to 7.4kte.

NTCF price was down 10.9% QoQ / up 32.7% YoY to Rs132 in Q2FY23-TD. Caprolactam price rose 4.4% QoQ / 11.4% YoY to Rs182. NTCF-caprolactam spread was negative at Rs50 vs negative Rs26 in Q1FY23. Notably, NTCF import volumes rose 7.3% YoY to 11.6kte.

BOPET price dipped 1.4% QoQ / up 22.9% YoY to Rs166. PTA price rose 9.8% QoQ / 46.6% YoY to Rs83, and MEG price was down 9.8% QoQ and 6.9% YoY at Rs46. BOPET-PTA/MEG spread dipped 8.1% QoQ / up 13.6% YoY to Rs79 (vs Rs86 in Q1FY23). On a MoM basis, spread was down 7.1% at Rs77 in Aug’22.

BOPP price dipped 6.6% QoQ / up 9.1% YoY at Rs188 while polypropylene (PP) price was down 20.5% QoQ / 9.8% YoY to Rs87. BOPP-PP price spread rose 9.9% QoQ / 33.1% YoY at Rs101 (vs Rs92 in Q1FY23). 

Chemplast Sanmar: VCM and EDC prices have dropped sharply in Aug’22

Paste PVC price increased 7.5% QoQ/36.2% YoY to Rs162. Chemplast buys EDC for paste PVC, price of which has dipped 6.1% QoQ / up 9.9% YoY to Rs58. Paste PVC-EDC spread stood at Rs66 in Q2FY23-TD vs Rs49 in Q1FY23. EDC prices have fallen 16.2% MoM to Rs49 in Aug’22.

Suspension PVC (S-PVC) price dipped 7.3% QoQ / up 7.1% YoY to Rs105. VCM price dipped 21.5% QoQ / 4.4% YoY at Rs78. S-PVC-VCM spread was Rs27 in Q2FY23-TD vs Rs14 in Q1FY23. VCM prices have dropped 17.7% MoM to Rs71.

MDC (methylene chloride) price dipped 5.2% QoQ / up 4.5% YoY to Rs56; methanol price has dipped, while company produces chlorine. Our analysis suggests Chemplast spread for MDC is likely to be stable QoQ.

Caustic soda price was down 4% QoQ / up 90% YoY to Rs57 (vs Rs60 in Q1FY23).

Paste PVC import volumes rose 31.6% YoY to 2.9kte; S-PVC volumes rose 35.5% YoY to 49.4kte.

Sudarshan Chemical (SCIL): Organic pigment export volumes dip

Organic pigment price rose 2.5% QoQ / 20.4% YoY to Rs672 in Q2FY23-TD vs Rs656 in Q1FY23. Organic pigments are inclusive of all colours including CPC. Export volumes were down 26.8% YoY at 17kte. Pigment has suffered a slowdown in demand (particularly for plastics segment) which has hurt export volumes.

Azo pigment mixture prices dipped 0.7% QoQ / up 16.9% YoY to Rs541 vs Rs545 in Q1FY23. Azo pigment mixture export volumes dipped 13% YoY to 8.3kte.

Inorganic pigment price was down 6.1% QoQ / up 7.9% YoY to Rs113 vs Rs120 in Q1FY23.

Galaxy Surfactants (GSL): Lauryl alcohol prices soften in Aug’22

Lauryl alcohol price stood at Rs206, down 11.1% QoQ and up 28.6% YoY, vs Rs232 in Q1FY23. In Aug’22, price dipped 13.7% MoM to Rs189.

Price of LAB (linear alkyl benzene), a petroleum-based surfactant, was up 10.6% QoQ / 32.2% YoY to Rs169.

Rossari Biotech: Input price inflation eases

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

Price of lauryl alcohol, key basic raw material for surfactants, was Rs206, down 11.1% QoQ / up 28.6% YoY, vs Rs232 in Q1FY23.

Acetic acid price dipped 2.9% QoQ / 32.9% YoY to Rs52 in Q2FY23-TD (vs Rs54 in Q1FY23).

Acrylic acid price dipped 1.6% QoQ / up 40.6% YoY to Rs176 (vs Rs178 in Q1FY23). Price dipped 7.1% MoM at Rs170 in Aug’22.

Silicone oil price was down 7.5% QoQ/ up 64.5% YoY to Rs496 in Q2FY23-TD (vs Rs536 in Q1FY23). 

EPL Ltd: Dip in polymer price

Price of LLDPE, a key input for laminates, was Rs103, down 2.9% QoQ / up 20.7% YoY, vs Rs106 in Q1FY23. It dipped 1% MoM to Rs103 in Aug’22.

Vinati Organics

Ibuprofen price rose 1.5% QoQ / 2.9% YoY to Rs1,176 (vs Rs1,159 in Q1FY23).

IBB price rose 4% QoQ (22.2% YoY) to Rs198.

Atul Ltd

2,4-D price dipped 0.8% QoQ/ up 23.1% YoY to Rs266. Export volumes rose 14.5% YoY to 4.8kte.

Paracresol price inflation was 4.5% QoQ and 61.6% YoY at Rs298. Export volumes dipped 39.8% YoY to 1.5kte.

Epoxy price was down 0.8% QoQ and 7.8% YoY at Rs320. Export volumes dipped 1.4% YoY to 4.5kte.

Resorcinol price rose 14.2% QoQ/ 8% YoY to Rs851. Export volumes dipped 44.1% YoY to 105te.

Gujarat Fluorochemicals – PTFE price steady

PTFE price was up 3.0% QoQ/ 23.7% YoY to Rs963 (vs Rs935 in Q1FY23). PTFE (to fluorspar) spread rose 2.9% QoQ and 21.9% YoY to Rs865 (vs Rs841 in Q1FY23). PTFE export volumes were down 18.5% YoY to 2.3kte.

R-22 price rose 10.1% QoQ / 53.7% YoY to Rs295. Fluorspar (acid spar) price was up 3.8% QoQ / 42.3% YoY to Rs38. R-22 spread (to fluorspar and chloroform) was Rs174 vs Rs139 in Q1FY23.

Caustic soda price was down 4% QoQ / up 90.1% YoY to Rs57 (vs Rs60 in Q1FY23).

PCBL – carbon black export prices increase

Carbon black price was up 12% QoQ and 59.5% YoY to Rs138 (vs Rs124 in Q1FY23). Export volumes were down 2.6% YoY to 34kte. Price increased 3.8% MoM to Rs141 in Aug’22.