While China opening up was expected to have resulted in lower imports into India during Q4FY23, import volumes across PVC, Ammonium Nitrate (AN), Soda Ash, Caustic Soda, TDI and Bromine rose sharply. While the rise in AN can be attributed to easing supplies from China, a weaker demand environment globally would have led to dumping of these chemicals into India. Higher imports have created headwinds for domestic import substitution products during Q4. Declining freight costs have only aggravated the pain.
DAP and NPK imports from Russia rise in FY23
Imports of NPKs rose ~66% YoY in FY23. Growth in volumes was primarily driven by the increased imports from Russia, which grew 148% YoY to ~1.6mn MT. Thus, Russia’s share of imports into India rose from ~63% in FY22 to ~93% in FY23. Similarly, DAP imports too climbed up ~11% YoY in FY23 to 6.5mMT as imports from Russia went up.
Sharp jump in import volumes in some chemicals
Surprisingly, despite on-going dumping investigation, PVC imports almost doubled QoQ in Q4. This has caused pressure in domestic realizations. Soda ash imports too doubled, thereby compelling domestic players to take price cuts. AN imports rose 47% in FY23, largely on the back of ~80% QoQ jump in Q4, as supplies from Russia eased considerably.
India continues to be net exporter of Caustic Soda
Lower production in Europe has seen India emerging as a net exporter of caustic soda. Exports to European countries (Netherlands, Spain, Italy, Belgium, etc.) rose 241% YoY. However, with the situation easing, export volumes dropped 29% QoQ while import volumes increased 26% QoQ during Q4. Though India still remained a net exporter during Q4, the quantum fell 64% to 20,000 MT only.
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