R-22 prices rose to Rs 257 (up 33.9% QoQ) in Q3FY22, catching up with inflation in other ref-gases, which will benefit SRF, Navin Fluorine and Gujarat Fluorochemicals (GFL). In packaging film segment, spread has increased for BOPET, but has been lower for BOPP (QoQ).

SRF sees large new line commissioning which may put pressure on margins in near term. 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 started rising again from Dec’21. Inflation in Rossari Biotech’s four key raw materials will keep company margins under pressure.

Pigment prices have increased (good for Sudarshan Chemical), but it was not able to complete pass-on inflation in Q3FY22. 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)

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

R-22 prices rose 33.9% QoQ (up 64.1% YoY) to Rs257 in Q3FY22. Fluorspar (acid spar) prices were up 8.0% QoQ / down 2.6% YoY at Rs29. R-22 spread (to fluorspar and chloroform) was Rs150 vs Rs87 in Q2FY22. R-22 prices were up 2.7% MoM to Rs289 in Dec’21. Export volumes have dipped 37% YoY to 3kte.MDC (methylene chloride) prices rose 8.0% QoQ / rose 74.8% YoY to Rs58; methanol prices and chlorine prices have increased. Our analysis suggests spreads / margins in MDC for SRF should be lower.NTCF prices were up 33.7% QoQ / down 6.7% YoY, to Rs133 in Q3FY22. Caprolactam rose 0.2% QoQ / 98.1% YoY at Rs164. NTCF-caprolactam spreads were at a negative Rs31 vs negative Rs64 in Q2FY22. Notably, NTCF import volumes have grown 148% YoY (down 19.5% QoQ) to 18.6kte.BOPET prices grew 10.6% QoQ / 34.8% YoY to Rs150. PTA rose 9.6% QoQ / 76.9% YoY to Rs62, and MEG prices were up 16.5% QoQ / 71.0% YoY at Rs58. BOPETPTA/MEG spreads were up 9.9% QoQ / 10.5% YoY to Rs77 (vs Rs70 in Q2FY22). On MoM basis, spreads were up 7.7% to Rs80 in Dec’21.BOPP prices were 6.5% QoQ / 32.5% YoY higher at Rs183 while polypropylene (PP) prices were up 12.6% QoQ / 58.9% YoY at Rs109. BOPP-PP price spread was down 1.3% QoQ / up 6.6% YoY at Rs75.

Navin Fluorine (NFIL): R-22 spreads improved

R-22 prices rose 33.9% QoQ / 64.1% YoY to Rs257. Fluorspar (acid spar) prices were up 8.0% QoQ, down 2.6% YoY to Rs29. R-22 spread (to fluorspar and chloroform) was Rs150 vs Rs87 in Q2FY22. NFIL should be positively impacted from lower chloroform prices QoQ. 

Chemplast Sanmar: PVC spreads lower

Paste PVC prices were up 4.5% QoQ and 13.3% YoY to Rs124. Chemplast buys EDC for paste PVC, which is up 30.9% QoQ / 161.1% YoY to Rs69. Paste PVC – EDC spread stood at Rs10 in Q3FY22 vs Rs32 in Q2FY22.Suspension PVC (S-PVC) prices rose 14.5% QoQ / 62.8% YoY to Rs113. VCM prices increased 31.6% QoQ / 54.6% YoY to Rs108. S-PVC-VCM spreads were Rs5 in Q3FY22 vs 16 in Q2FY22.MDC (methylene chloride) prices dipped 8.0% QoQ / rose 74.8% YoY to Rs58; methanol prices and chlorine prices have increased. Our analysis suggests Chemplast spreads for MDC have dipped QoQ.Caustic soda price was up 68.6% QoQ / 124.3% YoY to Rs51 (vs Rs30 in Q2FY22).Paste PVC import volumes dipped 35% YoY to 3.3kte; and S-PVC volumes rose 11% YoY to 118kte in Q3FY22.

Sudarshan Chemical (SCIL): Organic pigment realisation expanded 21.1% YoY

Organic pigment prices rose 5.4% QoQ / 21.1% YoY to Rs589 in Q3FY22 vs Rs558 in Q2FY22. Organic pigments are inclusive of all colours including CPC. Their export volumes were up 3.4% YoY to 32kte in Q3FY22.Azo pigment mixture prices increased 2.7% QoQ / 22.0% YoY to Rs476 vs Rs463 in Q2FY22.Inorganic pigment prices rose 5.7% QoQ / 15.5% YoY to Rs110 vs Rs104 in Q2FY22.

Galaxy Surfactants (GSL): Lauryl alcohol prices hardened in Dec’21

Lauryl alcohol prices were Rs157, down 1.9% QoQ, but rose 69.3% YoY, vs Rs160 in Q2FY22. It rose 3.9% MoM to Rs160 in Dec’21.LAB (linear alkyl benzene), a petroleum-based surfactant, price was up 2.2% QoQ / 70.1% YoY to Rs130. 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, price was Rs157, down 1.9% QoQ but up 69.3% YoY, vs Rs157 in Q2FY22.Acetic acid prices dipped 1.4% QoQ / rose 183.3% YoY to Rs77 in Q3FY22 (vs Rs78 in Q2FY22). In Dec’21, the price was Rs77, up 15.8% MoM, which means inflation accelerated in Q3FY22-end.Acrylic acid prices have risen 33.3% QoQ / 124.9% YoY to Rs166 (vs Rs125). Acrylic acid was Rs179 in Dec’21, up 9.2% MoM.Silicone oil prices were up 39.3% QoQ and 97.7% YoY higher at Rs420 in Q3FY22 (vs Rs301 in Q2FY22).

EPL Ltd: Polymer prices rose again in Dec’21

Prices of LLDPE, a key input for laminates, were Rs98, up 14.4% QoQ / 48.3% YoY, vs Rs86 in Q2FY22. Prices rose 3.4% MoM to Rs101 in Dec’21.

Vinati Organics

Ibuprofen prices rose 4.0% QoQ, but dipped 39.3% YoY to Rs1,189 (vs Rs1,144 in Q2FY22).IBB prices rose 4.8% QoQ (40.5% YoY) to Rs170.

Atul Ltd

2,4-D prices rose 16.8% QoQ and 62.5% YoY to Rs252. Export volumes rose 58% YoY to 8kte in Q3FY22.Paracresol prices increased 37.4% QoQ and 78.5% YoY to Rs254. Export volumes rose 29.2% YoY to 3.3kte in Q3FY22.Epoxy prices were up 3.4% QoQ and 96.5% YoY at Rs358. Export volumes rose 43.4% YoY to 6.5kte in Q3FY22.Resorcinol prices dipped 18.5% QoQ and were flattish YoY at Rs642. Export volumes fell 43.3% YoY to 471te in Q3FY22.

Gujarat Fluorochemicals

PTFE prices were up 6.0% QoQ and 20.8% YoY to Rs826 (vs Rs779 in Q2FY22). PTFE (to fluorspar) spread expanded 5.8% QoQ and 23.7% YoY to Rs751 (vs Rs710 in Q2FY22). PTFE export volumes were up 41% YoY to 3.5kte.R-22 prices rose 33.9% QoQ and 64.1% YoY to Rs257. Fluorspar (acid spar) prices were up 8.0% QoQ and down 2.6% YoY to Rs29. R-22 spread (to fluorspar and chloroform) was Rs150 vs Rs87 in Q2FY22. GFL should be positively impacted from lower chloroform prices QoQ.Caustic soda prices were up 68.6% QoQ / 124.3% YoY to Rs51 (vs Rs30 in Q2FY22).

PCBL

Carbon black prices were up 1.0% QoQ and 48.7% YoY to Rs88 (vs Rs87 in Q2FY22). Carbon black export volumes were up 44.8% YoY to 53.7kte.

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