RIL may further drop C9 prices amid low demand – 29 Jul 2014

 On July 17, Reliance dropped C9 solvent prices to a new low of Rs.72.50, keeping in view the depressed buying sentiments. RIL's C9 Monthly price was quoted as 74.50 on July 1, 2014, which was down by Rs.1.50 from the previous month. Abrupt monsoon behavior has hit the agrochemical market (one of the biggest end user consumer for C9) really bad. It is being expected that import prices could show a sharp decline in the coming two weeks. Though, other end users (paint, coating & thinner manufacturers) are certainly reaping out good margins.

The other factor that affected the demand was bulk buying by the traders before the peak season. C9 was trading at Rs.86-89 in the same season last year but this year market moved against the expectations of the traders and demand did not take off. This has resulted in piling up of inventory and sellers reducing the margin and eventually incurring losses.  RIL is the market leader in C9 solvent market in India but cheaper imports, specially from Shell have forced the petrochemical giant to check their price again this month. Keeping in view the current market scenario, RIL could further decline the C9 solvent prices.

Q2 is considered as the strongest cyclic period as far as the demand for C9 solvent is concerned. Manufacturers like Ganga Rasayanie, Arham Petro and even RIL for that matter failed to meet the demand last year which reached threshold in the last week of August last year. At that point too, big players like BASF and BAYER had to book bulk quantities from Shell in order to ensure continuous and long term supplies.