The sharp surge in prices of phenol, methanol and melamine led to industries on a halt during October further compelling many producers even to suspend production is now limping back to normalcy. Till writing this news, the phenol prices were reported to downward trend and noted to reach around Rs 105 level, that was once crosses Rs 150 mark. The formalin
prices too eased up. Chemical Suppliers confirmed that there are sufficient stocks of phenol in port and domestic production at Deepak Phenolics is reported to smooth. Methanol supply is also normal from Iran after soft stand by US. The crude oil prices have been also easing up, hence the rupee is becoming stronger.
The un-expected rise in input cost was completely unviable for producers in HPL and Plywood industries. Following which the prices of finished materials were increased because the competition is such that industries were already incurring losses on previous price levels. The price rise in Phenol saved the HPL industry as the industries were not able to get the desired prices because of varying strategies different HPL units. The price rise in chemicals brought the industries together to speak in one voice leading to price increase in all categories saving the industries from closure. The rising prices fuelled talk of second round of price increase announcement when phenol crossed Rs 125 level. “We were in total loss making stage yet we could not increase the prices because we recently increased the prices in HPL, hence we decided to reduce/suspend the plant production” said a producer from Ahmedabad said to the Ply Reporter.
A similar scenario was noted in Film faced plywood segment but there the manufacturers successfully got the price increase on Rs 2.00 accepted by markets hence closing was not a threat there. Also since, the chemical component in plywood making cost is far lower compared to HPL the impact is not as big as HPL segment, the plywood producers did not see any significant threat like closure.
Chemical suppliers also admitted the lower demand of chemicals from industry however the supply and stock are reported to improve. Chemical suppliers feel that formaldehyde and melamine prices are softening gradually after smooth import of methanol from Iran.