Phenol prices to crumble amid boost in supplies of imported and domestic material – 19 Nov 2014

There are huge stocks of Phenol at Kandla Port (Kutch), Dist. Bhuj. At present there is around 15200 MT of phenol is available at the port. Shipment of up to 6500 MT is expected to arrive soon at the Kandla port. Phenol prices in the Indian domestic market may fall during the last week of November or early December, when these imported cargoes touch the Indian shores, market sources informed Indianpetrochem on Tuesday.

Also, Crude oil values have plummeted over the past couple of weeks because of oversupply and worries over weakening demand. Phenol consumers in India are targeting a substantial decrease in the price of the product on the back of the heavy availability of the product and weakness in the crude oil market. The shipment will soon arrive at the Kandla port and local buyers are just holding back their purchases to buy something cheaper.

The HOCL unit in India has also resumed production of Phenol in late October after a gap of about six months. The production was stopped due to some serious financial crunch, however production resumed after the company was able to raise about Rs150 crore from the market with the help of a government guarantee. However, the resumption of production of phenol has seen a ‘price war’ unfold in the market with importers of this product allegedly cutting prices to keep the public sector company at bay.

According to the trade union sources, phenol units were working only at 70 to 80 per cent capacity because of the serious price competition in the market. Demand for Phenol in India domestic market has also come under pressure due to ensuing winter season and an array of challenging market conditions including serious price war, limited availability of credit in a tough economic environment. In a nutshell, demand in the market in not enough to mop up this excess supply of phenol.

Currently, Phenol prices are being traded at Indian rupee Rs96 per kg ex-tank in Kandla.