Despite facing challenges in the global chemical market, Indian chemical companies are positive about recovery in margins during the second half of the fiscal year 2024. Most companies attribute this positive outlook to growing interest from global companies in procuring from India, an expanding share of specialty chemicals, and substantial capital expenditures by Indian chemical firms.
A recent research report from SMIFS Limited, a capital market company, highlighted that key export markets like the US and Europe are currently witnessing a sluggish demand pace, particularly in the agrochemical sector. However, the report also suggested that the worst phase of global destocking in this space is likely over, and a return to normalcy is expected soon.
The chemical industry, the report noted, is navigating through challenges such as volatile commodity prices due to intensified competition, geopolitical tensions, supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) impacting crude oil supplies, and uncertainties in demand. Despite these global headwinds, India’s chemical sector remains resilient, propelled by increased interest from global companies looking to source from India and strategic capital expenditures aimed at securing future growth.
As reported by Business Today, in October 2023, SMIFS Limited reported a surge in demand for C12-14 fatty alcohols in the Asian market, notably in China and India. This heightened demand resulted in increased prices, buoyed by stable feedstock prices at around $800 per metric ton in Malaysia and additional upward pressure from rising crude oil prices. In contrast, the fatty alcohol ethoxylates (FAE) market in Asia faced a subdued period attributed to economic conditions, leading to a decline of approximately 5% in C12-14 prices since August.
