Supply surge and sluggish demand pulls basic price of Phthalic Anhydride producers in India – 4 Apr 2014

In the last month higher than average import shipments of Phthalic Anhydride hit Indian shores, which skewed the market dynamics favoring a fall in prices for the chemical in India. In this review, Indianpetrochem summarizes the Ex-Factory price tend for various domestic manufacturers along with a comprehensive overview of the demand tend for the chemical and the market dynamics for its feedstock, Ortho Xylene.

Herdillia (S.I Group), IG Petrochem, and Thirumalai Chemicals are the main domestic manufacturers for Phthalic Anhydride in India, with significant pan- Indian presence.

According to data gathered by Indianpetrochem, the basic price of  Herdillia and Thirumalai Chemicals have been on a downtrend since the past few months. The average basic price for Herdillia manufactured product was around Rs. 106 per kg in February thereon it declined to Rs. 101 per kg in March and at present its Ex-Factory is around Rs. 91 per kg, all prices are exclusive of all taxes.

In similar fashion, Thirumalai Chemicals has been conducting a downward price revision for Phthalic Anhydride, whereby the basic price was around Rs. 105 per kg in February, thereafter the prices moved to Rs. 100 per kg and at present the current basic price is around Rs. 93.5 per kg, all prices are exclusive of all taxes.

A magnitude of factors have supported a decline in prices for the chemical in the county. First and foremost, the demand for Phthalic Anhydride has been weak to moderate across major trading hubs in the country. To add to this, there has been a surge in stock supplies for the chemical in the market over the past few months.

"Imports of around 8,000 metric tonnes hit the Indian shores last month, usually average imports of around 3,000 metric tonnes per month suffice the market for Phthalic Anhydride in the country", an industry source confirmed.

Over and above, the price of its feedstock, i.e, Ortho Xylene has been declining in the Indian markets as well in the past couple of months due to surge in imports and poor off takes from end customers.

"Ortho Xylene prices have been continuously declining in the Indian market over the past few months, so much so that this is seriously impacting the profit margins of importers in the country. To add to the woes of imports, appreciating rupee has been hitting their profit margins as well. In line with these events, majority of importer are refraining booking any import shipment for Ortho Xylene", a prominent importer told the website.

Ultimately, there is a market expectation that at present the price for Phthalic Anhydride has bottomed out and there isn't any expectation of a further price decline, based on market sentiment surveyed by the website. Recent developments in the economic landscape of the country assures a positive outlook for India and overall petrochemical and chemical industry.