Andhra Petrochemicals is the sole manufacturer of n-Butanol in India. However, due to competitively priced imports and rising feedstock prices supplied by Hindustan Petroleum Corporation Limited (HPCL), the company has ceased its plant operations since 26th May, 2014. This shutdown has marginally impacted bulk prices recently and, going forward, there are expectations of a stable price range.
Andhra Petrochemicals has an installed manufacturing capacity of 73,000 metric tonnes for Oxo Alcohols. Roughly, the company has 30% market share for Oxo Alcohols within India, rest being dominated by cheaper imports.
Prior to Andhra Petrochemicals plant shut-down, the ex- factory price of n-Butanol was at Rs. 84 per kg, while imported chemical ex- Kandla was priced at Rs. 79 per kg.
As a result of the shutdown, the price has gained weight by Rs. 2-3 per kg to Rs. 82-82.5 per kg; the price however is currently stable at this range.
Andhra Petrochemical has had problems with feedstock procurement from HPCL in the past. According to the latest annual report of the company, the plant was shutdown for 212 days in FY 2013-14, out of which 89 days were on account of a fire accident (on 23rd August, 2013) in HPCL, 58 days on account of Propylene Recovery Unit Revamp by HPCL and 65 days due to cheaper imports of Oxo Alcohols.
An official informed the website, "After the fire incident, HPCL increased the price Propylene by 15-20% within a month. This along with competitively priced imports urged Andhra Petrochemicals to cease its plant operations recently, and right now its hard to put a timeline to the date it will resume operation".
Ideally, this shutdown should have had an impact on the South Indian markets as limited indigenous stocks reach Mumbai and Gujarat markets, which are dominated by imports. But, a Chennai based trader informed the website that the shutdown had limited impact on the market as there were ample n-Butanol stocks available at Kandla port for the Southern market.
Currently, there is strong demand for the chemical from paint (nitrocellulose lacquers) and pesticide industries, the websites gathers from traders in the Southern and Eastern markets. As there is no expectation of a shortage in supply (imports), most traders expect the current prices to remain stable in the short to medium term, unless of course the exchange rate moves significantly.
Andhra Petrochemicals has an installed manufacturing capacity of 73,000 metric tonnes for Oxo Alcohols. Roughly, the company has 30% market share for Oxo Alcohols within India, rest being dominated by cheaper imports.
Prior to Andhra Petrochemicals plant shut-down, the ex- factory price of n-Butanol was at Rs. 84 per kg, while imported chemical ex- Kandla was priced at Rs. 79 per kg.
As a result of the shutdown, the price has gained weight by Rs. 2-3 per kg to Rs. 82-82.5 per kg; the price however is currently stable at this range.
Andhra Petrochemical has had problems with feedstock procurement from HPCL in the past. According to the latest annual report of the company, the plant was shutdown for 212 days in FY 2013-14, out of which 89 days were on account of a fire accident (on 23rd August, 2013) in HPCL, 58 days on account of Propylene Recovery Unit Revamp by HPCL and 65 days due to cheaper imports of Oxo Alcohols.
An official informed the website, "After the fire incident, HPCL increased the price Propylene by 15-20% within a month. This along with competitively priced imports urged Andhra Petrochemicals to cease its plant operations recently, and right now its hard to put a timeline to the date it will resume operation".
Ideally, this shutdown should have had an impact on the South Indian markets as limited indigenous stocks reach Mumbai and Gujarat markets, which are dominated by imports. But, a Chennai based trader informed the website that the shutdown had limited impact on the market as there were ample n-Butanol stocks available at Kandla port for the Southern market.
Currently, there is strong demand for the chemical from paint (nitrocellulose lacquers) and pesticide industries, the websites gathers from traders in the Southern and Eastern markets. As there is no expectation of a shortage in supply (imports), most traders expect the current prices to remain stable in the short to medium term, unless of course the exchange rate moves significantly.
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