Hydrogen Peroxide Prices Drop Amid Weak Demand & Rising Production
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Domestic hydrogen peroxide prices fell by ₹1/kg due to weak downstream demand and increased production. Key industries like textiles and pharmaceuticals continue to show sluggish demand. With ample supply and cautious buyer sentiment, prices are expected to remain under pressure, with further corrections likely in the near term.
Key Highlights:
- Price Correction: Hydrogen peroxide prices declined to ₹24/kg Ex-Mumbai and ₹24.50/kg Ex-Dahej.
- Supply Levels High: Domestic production remains strong, leading to price pressure.
- Weak Demand: Textile and pharmaceutical industries continue to show reduced purchasing activity.
- Market Trends: Global crude oil prices declined by 0.53%, while natural gas surged by 4.21%.
- Outlook: Prices expected to remain bearish as buyers avoid long-term commitments.
Hydrogen Peroxide Prices Decline as Supply Increases
- Domestic hydrogen peroxide prices witnessed a decline of ₹1/kg this week, settling at ₹24/kg Ex-Mumbai and ₹24.50/kg Ex-Dahej on 60-day payment terms.
- Traders' offers varied, with lower price indications ranging between ₹24-25/kg Ex-Gujarat under 90-day credit terms.
- The price correction is largely driven by weak downstream demand and an increase in domestic production.
Downstream Demand Remains Weak, Affecting Price Trends
- Supply levels remain elevated as domestic manufacturers continue operating at improved production capacities. However, subdued demand from key downstream industries is exerting downward pressure on prices.
- Hydrogen peroxide's primary end-use sectors include pulp & paper, textiles, water treatment, semiconductors, and pharmaceuticals.
- Demand from the textile and pharmaceutical industries remains sluggish due to reduced production activity.
- India’s monthly hydrogen peroxide demand is estimated at 34 kt, while the domestic production capacity stands at 39 kt per month.
- Manufacturer-wise Production Capacities:
1. Meghmani Finechem: 5 kt/month
2. National Peroxide: 12.5 kt/month
3. India Peroxide: 12.5 kt/month
4. GACL: 1.04 kt/month
5. HOCL: 0.45 kt/month
6. Chemplast Sanmar: 2.83 kt/month
7. DCM Shriram: 4.37 kt/month - The demand outlook for February remains bearish, influenced by weak consumption trends and cautious market sentiment. Buyers are opting for spot purchases rather than booking inventories, anticipating further price corrections.
Global Energy Prices Show Mixed Trends
In the global market, upstream crude oil and natural gas prices exhibited mixed trends:
1. WTI crude oil prices declined by 0.53%, closing at $72.09 per barrel.
2. Natural gas prices surged by 4.21%, reaching $4.32/MMBtu.
3. FOB Korea SM Prices: Increased by USD 5/mt, reaching USD 1050-1060/mt.
4. CFR China SM Prices: Rose by USD 5/mt, assessed at USD 1060-1070/mt.
5. Upstream Benzene Prices: Remained stable at USD 915-925/mt FOB Korea.
Expert Opinion: Volatility Expected Amid Cautious Buyer Sentiment
It is expected that hydrogen peroxide prices to remain volatile this week, influenced by weak demand and cautious buyer sentiment. As buyers refrain from committing to long-term contracts and inventory buildup, the market is likely to stay bearish throughout February.
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