Phenol and formaldehyde prices have witnessed a sharp upward turn during November creating a pressure to recalculate product prices. According to trade reports the phenol prices scaled up by 15 percent in one-month period and continue to move up without even a pause. Importers say that the prices have gone up because of increasing prices of Benzene and Crude Oil in international market. As per market report the basic phenol price has crossed at Rs 90 ex Kandla during last week in November. A couple of weeks ago the Phenol was ranging around 18-20 % lesser price range.
The Methanol prices too have reportedly gone up during the same time period thus pushing up the prices of formaldehyde. There has been an increase of 12-15% in formaldehyde prices by the formal suppliers to the industry. Various Chemical importers confirmed the further increase in prices of methanol can be witnessed because of high demand in China since last one & half month period. On the contrary the production of wood panel, plywood and laminates are reported to be slow to the limit that industry is able to utilizing its 70 percent of capacity because of weak demand. Although the trade anticipates some spark in movement of finished products after the government decision of lower GST on plywood and panel products from 28 to 18 percent.
Increasing prices of phenol and formaldehyde have pushed the prices of glue and resins that are adding up to the input cost of plywood and laminates. Producers are planning to pass on the cost increase to markets by raising the prices of finished goods by approximately 5% varying on the basis of product and quality. Industry sources informed that meeting of different Associations has been called on immediate basis to analyze the cost due to chemicals’ price increase. It is expected that there could be price rise announcement by companies in December month.