‘As dumping of chemicals by China recedes, 3 companies to benefit most’
Jason Soans, Lead Research Analyst, IDBI Capital Markets, says “earlier there was a lot of dumping and now this China dump has proved to be unsustainable and hence there is some support for soda ash prices. Also, capacities, utilisation and inventory levels have come under control. Hence, soda ash prices have found some support leading to an uptick in prices. Tata Chemicals and GHCL as the largest domestic producers of soda ash, have been benefiting from the uptick in prices.”
Let us discuss the pricing of various chemicals because that seemed to be on an uptick. Let us start with soda ash itself because we are seeing the likes of GHCL as well as Tata Chemicals doing quite well. What has been your reading of how the prices are moving?
Soda ash prices have risen from around $285 per tonne to around $373 per tonne, which is a good and a sharp up move.
What is happening in soda ash is that earlier there was a lot of dumping and now this China dump has proved to be unsustainable up to a certain level and hence there is some support for soda ash prices. Over and above that, capacities, the utilisation and inventory levels also have come under control. Hence, soda ash prices have found some support leading to an uptick in prices.
Tata Chemicals and GHCL as the largest domestic producers of soda ash, have been benefiting from the uptick in prices.
Of course, that benefit is coming after various months of decline. At least there is some recovery in prices. What about acetic acid prices? They also have seen a sharp increase. Which are the companies which are likely to benefit from this?
Basically, in terms of acetic acid, the benefit is for players such as Jubilant Ingrevia.
