Chemicals: Export realisation plummets

6 Nov 2023 , 11:32 AM

The trade data report sheds light on the evolving trends in the import of bulk chemicals and the realization of key product exports during Q2FY24. While there was an uptick in exports in Sep’23, the overall export levels remain below the monthly averages seen in FY23. Realizations for both chemicals and agrochemicals experienced a steep decline, potentially affecting the profitability of companies. Import volumes of key bulk chemicals remained elevated, creating challenges for domestic import substitution products. On a positive note, there has been a recent increase in the Deep Sea Chemical Index and tanker rates, and if this trend sustains, it could favour import substitution. Fertilizer imports have eased, primarily due to a significant decline in imports from Russia. 

DAP and NPK imports ease: 

Imports of NPKs declined ~32%/48% YoY/QoQ in Q2’24. The decline in volumes was primarily driven by the decreasing imports from Russia, with almost entire volumes being imported from Russia. DAP import volumes declined ~42% YoY to 1.2 mn MT in Q2’24. India imported ~0.6mn MT of DAP from China during Q2’24 which accounted for ~52% of total imports as against ~21% in Q2’23. 

Imports remain elevated: 

After witnessing moderation during Q1’24, PVC imports have surged again during Q2’24 (up 19% QoQ and 84% YoY). Phenol imports were down 5%/9% QoQ/YoY Q2’24 while Bromine imports surged 49%/93% QoQ/YoY. In particular, imports from Jordan rose 43%/44% QoQ/YoY. India became net exporter of Caustic soda as imports declined. Though ammonia prices are still lower YoY, the trend is positive as the prices recovered from lows in July at $290/Mt to $397/Mt in Sept’23. The spot prices are hovering around $550/MT currently. 

Exports trending lower as realisation plummets: 

While there was an uptick in exports in Sep’23, the overall export levels remain below the monthly averages seen in FY23. Realizations for both chemicals and agrochemicals experienced a steep decline, potentially affecting the profitability of companies. The refrigerant prices have witnessed a steep fall of 20-40%YoY while fluoropolymers like PVDF is down~50%. Agrochemicals like 24D is down 54% while Glufosinate is down 27%.