Deepak Phenolics Shutdown Boosts Domestic Prices Amid Weak Demand
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The domestic prices for Phenol, Acetone, and IPA have seen a sharp increase following the announcement of a planned maintenance shutdown at Deepak Phenolics' plant, which is scheduled to take place from 10th to 25th October 2024. Currently, import offers for Phenol have risen to ₹105/kg (Ex-Kandla), marking a ₹2/kg increase on an advance payment basis. Acetone prices have also climbed by ₹2/kg, now priced at ₹83/kg (Ex-Mumbai) and ₹82.50/kg (Ex-Kandla) under similar payment terms.
Chemical Price
- Domestic prices for Phenol, Acetone, and IPA rose sharply following the announcement of a planned maintenance shutdown at Deepak Phenolics’ plant, scheduled from 10th October to 25th October 2024.
- Today, import offers for Phenol are higher at ₹105/kg (Ex-Kandla), an increase of ₹2/kg on an advance payment basis. Acetone prices have also risen by ₹2/kg, now at ₹83/kg (Ex-Mumbai) and ₹82.50/kg (Ex-Kandla) under similar payment terms. IPA prices surged by ₹3/kg to ₹106/kg (Ex-Mumbai) and ₹105/kg (Ex-Kandla) on advance payment.
- However, in the international market, prices for Phenol, Acetone, and IPA are undergoing corrections due to falling feedstock prices.
Chemical Demand and Supply
- Deepak Phenolics, India’s largest producer of Phenol and Acetone, has a monthly production capacity of 38 kt for Phenol, 7 kt for Acetone, and 6 kt for IPA.
- Demand from the pharmaceutical sector remains weak due to the ongoing Navaratri festival, with major pharma manufacturers either shutting down or operating at reduced rates. Despite this, news of the unexpected shutdown at Deepak Phenolics has driven IPA prices upward this week.
- Demand for Phenol remains mixed, largely due to decreased demand from the plywood sector. Acetone demand is also varied, as bulk drug manufacturers have reduced their production rates.
- However, importers have increased prices in response to the Deepak Phenolics shutdown, as supplies are expected to be halted until 25th October 2024. Additionally, weak Benzene prices are likely to exert downward pressure on Phenol and Acetone prices, according to a leading indentor.
- Bulk consumers are in a wait-and-watch mode, as replacement costs are lower, and they anticipate price corrections due to poor production rates.
Chemical News
- In the international market, WTI Crude Oil prices have increased by 0.39%, reaching $75.55/barrel, while Natural Gas prices rose by 0.37% to $2.68/MMBtu.
- FOB Korea Benzene prices stand at $935/MT, and Propylene prices are at $815/MT. Downstream, CFR China Phenol prices have dropped by $25 to $995/MT, and CFR China Acetone prices have fallen by $150 to $780/MT. CIF India offers for mid-November arrivals are in the range of $1,050–$1,090/MT.
- In related news, Mitsui Chemicals has announced a plant shutdown at its propylene cracker located in Osaka, Japan, due to technical issues. The plant, which has a production capacity of 280 kt/year, was shut down on 30th September 2024.
Expert Opinion
Phenol, Acetone, and IPA prices will remain volatile in the short term due to the Deepak Phenolics shutdown. Decreasing replacement costs, weak downstream demand, and falling feedstock Benzene prices could lead to a price correction for these products. Buyers are advised to exercise caution when making bulk purchases.
Daily Market Report
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