Analysts said a flood of Chinese products plummeted chemical prices in the international market.

In May 2023, chemicals like acetic acid, acrylic acid, acrylonitrile, ethanol, ethyl acetate, methanol, and vinyl acetate monomer (VAM) dropped to their lowest prices since 2021.

According to this, the sharpest month-on-month (MoM) fall was witnessed in soda ash, acrylic acid and methanol, with prices falling 11.4%, 8.6%, and 8.5%, respectively.

China’s chemical commodities enter the worldwide arena amid low domestic demand tied with subdued demand in Europe, declining crude prices (10% MoM) exerted severe pricing pressure across the board, says Centrum Broker VP Rohit Nagraj.

Petchems, building blocks, and polymers prices were also corrected in May. The decrease in polymer prices was lower than that of petchems.

Companies involved in commodity chemicals productions recorded hard, the soda ash as exceptional, where prices rose sharply in two years, Kotak Institutional Equities said.

Inventory destocking by clients and weak demand from end-uses will likely linger on through most of H1FY24.

It believes only those chemical companies involved in contract trade and playing with the import switch theme will likely shine.

These consist of SRF, Navin Fluorine, Aether,

Anupam Rasayan, Ami Organics, Deepak Nitrite, Neogen, Clean Science and Vinati Organics.