OfBusiness Chemicals Dailies

3rd May’23

Price

• Methylene Di Chloride (MDC) prices are trading mixed due to poor demand. In the domestic market, prices are low due to a surplus supply and limited demand.
• Domestic manufacturers like GFL, SRF, Meghamani, TGV, GACL, and Grasim are priced differently because of cutthroat competition.
• The bulk deals for May 1st and 2nd half contracts were heard in the range of Rs.28-30++ Ex Plant basis on cash payment terms. However, small quantities are trading at Rs.32-33++ Ex plant basis on cash payment terms.
• Traders and bulk buyers are interested in covering inventory for the next three months as prices are very attractive. In the retail market, Intact barrel prices were Rs.35-36++ on Ex plant basis on cash payment terms by most domestic manufacturers.
• An arbitrage window was opened in the Asian market for exports for MDC from India, as the FOB India price is 360 $/Mt for bulk and 430$ for FCL load.

Demand and Supply

• The decrease in MDC demand is due to reduced run rates from primary downstream manufacturers such as Pharma, Metal cleaning, and Chemical processing.
• Recent capacity expansion from major domestic manufacturers can serve the total Indian MDC demand by domestic manufacturers themselves. However, seasonal demand from Paints and Foam manufacturers will likely support MDC demand to some extent.

News

• Upstream Natural gas prices fell nearly 5.1% on Tuesday to 2.19$, and Feedstock CFR China Methanol prices fell 5$ to 285 $/Mt.
• Week on Week, CFR China Methanol prices fell nearly 15$ on bearish market sentiments in Asia.

OFB’s Opinion

• It is predicted that prices of Methylene Di Chloride (MDC) will remain low this week due to surplus supply and limited demand. However, bulk buyers are interested in making inventory due to lower prices, which could change the outlook from bearish to stable.