Limited stock availability of Isopropyl Alcohol (IPA) by Deepak Fertilizers and Chemicals in India has escalated the bulk price to trading range of Rs. 120-125 per kg, Ex- Kandla, this week. Deepak Fertilizer is the sole manufacturing company for IPA in India and due to its turnaround last month, Indian markets was completely reliant on imports.
During Deepak Fertilizers plant turnaround, the company was importing the chemical and catering to the local demand. As such it had the monopoly in terms of stocks and price of the chemical. However, strong and steady demand from the paint and pharmaceutical industry has caused the prices to continually gain weight week after week to highs of as much as Rs. 130 per kg, Ex- Kandla, this month.
However, the demand and supply dynamics of the chemical is set to change as new import shipments are expected to reach Indian shore by the second week of July. Fresh imports along with full scale operation of Deepak Fertilizers will increase the supplies in Indian market.
"High margins has urged another importer to import the chemical. This competition will cause the prices to decline to a trading range below Rs.100 per kg (Deepak Fertilizers) next month", a Mumbai based trader informed the market.
According to an industry informant, the future delivery of IPA by Deepak Fertilizers depicts a decline in prices, whereby delivery in the first half of July is priced at Rs. 96.50 per kg and delivery in second half of July is priced at Rs. 95.50 per kg. While IPA deliveries in the first half of August is priced at Rs. 94.50 per kg and second half of August at Rs. 93 per kg.
Thus, there is a clear trend of downward price movement for IPA in the India in the near future.
During Deepak Fertilizers plant turnaround, the company was importing the chemical and catering to the local demand. As such it had the monopoly in terms of stocks and price of the chemical. However, strong and steady demand from the paint and pharmaceutical industry has caused the prices to continually gain weight week after week to highs of as much as Rs. 130 per kg, Ex- Kandla, this month.
However, the demand and supply dynamics of the chemical is set to change as new import shipments are expected to reach Indian shore by the second week of July. Fresh imports along with full scale operation of Deepak Fertilizers will increase the supplies in Indian market.
"High margins has urged another importer to import the chemical. This competition will cause the prices to decline to a trading range below Rs.100 per kg (Deepak Fertilizers) next month", a Mumbai based trader informed the market.
According to an industry informant, the future delivery of IPA by Deepak Fertilizers depicts a decline in prices, whereby delivery in the first half of July is priced at Rs. 96.50 per kg and delivery in second half of July is priced at Rs. 95.50 per kg. While IPA deliveries in the first half of August is priced at Rs. 94.50 per kg and second half of August at Rs. 93 per kg.
Thus, there is a clear trend of downward price movement for IPA in the India in the near future.
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