Indian Acetylene Market Accelerates on the Backdrop of Escalated Input Costs
- 25-Jul-2022 3:02 PM
- Journalist: Jai Sen
Mumbai, India: In India, the price trends of Acetylene have been on a consistent uptrend. The cost of crucial energy materials such as Pet Coke amid widespread supply bottlenecks has pushed the manufacturing costs and substantially weighed on the increase in profit margins on Acetylene's market values. On the backdrop of curbed Russian supplies in the global market, the Indian energy market has demonstrated a bullish outlook.
As per the latest data, the prices of Acetylene have significantly escalated by nearly 4% in June from its last month's observed costs. The high power and freight costs have put substantial pressure on the profitability and debt metrics of the cement companies. On the upstream input cost front, the global surge in energy raw materials such as pet coke and Natural gas amid supply disruptions has pushed the Acetylene rates to a record high. The increase in price realizations of natural gas has a two-fold impact on the production costs of several petrochemicals, including Acetylene.
Furthermore, the downstream PVC price realizations have witnessed stagnant growth amid subdued demand from the pipes and fittings sector in the past two weeks of July 2022. The top market players have informed that the declined demand has compelled the manufacturers to halt production. With the week ending on July 22nd, the prices for downstream Poly Vinyl Chloride have stagnated. In addition, soaring input costs have caused deterred downstream purchasing activities for downstream PVC, further supporting the deteriorating demand outlook for Acetylene in the domestic market of India.
As per ChemAnalyst, the price trend of Acetylene will continue its upward trajectory in the near term amid the hiked input costs. One of India's major energy market players, Reliance Industries Ltd., is also planning to revise its natural gas prices by two-digit figures in the upcoming months, leading to an upturn in operational costs for Acetylene and its derivatives. In addition, the expected demand revival from the construction sector will likely impact the spot offers for Acetylene in the forthcoming weeks.