Traders and Importers Slash Phenol Prices Amid Inventory Glut
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In the domestic market, importers have reduced Phenol prices by ₹2/kg to ₹96/kg ex-Kandla on advance payment terms. Trader offers were also reported lower, at ₹97/kg ex-Kandla on 60-day credit terms.
Price
- In the domestic market, importers have reduced Phenol prices by ₹2/kg to ₹96/kg ex-Kandla on advance payment terms. Trader offers were also reported lower, at ₹97/kg ex-Kandla on 60-day credit terms.
- Offers from Deepak Phenolics' authorized dealers were at ₹97/kg ex-Dahej on 60-day credit terms. No bulk deals were reported yesterday or today, as buyers anticipate further price corrections due to bearish market sentiments.
- The decrease in Phenol prices is attributed to liquidation pressure caused by weak demand and surplus inventory at ports.
Demand and Supply
- Supply remains ample with continuous vessel arrivals. However, demand has significantly dropped due to heavy rainfall in the western and northern regions, leading to production disruptions.
- The liquidation of Phenol has become increasingly difficult, prompting traders and importers to offer lower prices to manage their working capital.
- Additionally, the monsoon season is typically an off-season for Phenol, and the heavy rains have further dampened demand. The ongoing corrections in upstream Crude oil, Naphtha, and Benzene prices have added to the bearish sentiment in the Phenol market.
- Increasing port inventories, coupled with lower replacement costs and prompt supply from domestic manufacturers, are likely to exert further downward pressure on Phenol prices, as projected by leading market participants.
- India’s demand for Phenol is approximately 38,000 tonnes per month, with HOCL and Deepak Phenolics contributing a combined output of 23,000 tonnes per month. This necessitates imports of around 15,000 tonnes each month. Non-integrated producers are facing significant pressure from conversion losses.
News
- In the international market, upstream Crude oil benchmark WTI prices decreased by nearly 3.11% on Friday to $73.55 per barrel.
- FOB Singapore Naphtha prices were at $663 per metric ton.
- Downstream FOB Korea Benzene prices stood at $995 per metric ton.
- FOB Korea Propylene prices were at $830 per metric ton.
Expert Opinion
- It is expected that Phenol prices are expected to remain bearish this week due to declining feedstock prices, lower replacement cost, inventory buildup at ports, and weak downstream demand. Hence, buyers are advised to adopt a just-in-time purchasing strategy rather than engaging in bulk deals, in anticipation of further price corrections.
Daily Market Report
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