Oversupply of Feedstock Drives Down the o-Nitro Toluene Prices in India
- 23-May-2023 11:39 AM
- Journalist: Gabreilla Figueroa
The demand for o-Nitro Toluene in the Indian market has been negatively impacted by the trade war with China and an oversupply of feedstock Benzene, resulting in slow downstream demand for azo dyes, Sulphur dyes, rubber, and agricultural chemicals. According to data from ChemAnalyst Research Team, the market value of o-Nitro Toluene has depleted, with costs at USD 1796/ton Ex-Works Vadodara. The Indian petrochemical sector has experienced a significant decline in capital investments, further affecting o-Nitro Toluene's production.
Despite the elevated Consumer Price Index (CPI) and Purchasing Managers' Index (PMI) in the Indian market, above mentioned factors have not substantially impacted the market value of o-Nitro Toluene. As reported by traders, the outlook for pesticide manufacturing has weakened due to heavy regulations in India, leading to lower consumption from the sector. Additionally, the production of pharmaceuticals derived from o-Nitro Toluene has decreased, affecting the inventory level of this product. The stock of raw materials has increased due to reduced procurement from the market for o-Nitro Toluene production.
There has been some relief in the market value of o-Nitro Toluene due to a 2% decrease in freight charges from China/East Asia to the North America East Coast, amounting to a price of USD 2,321/ton. Global freight volumes experienced a sharp decline, reaching some of the lowest rates in three decades. However, there are signs of stabilization at the beginning of the second quarter of 2023. In the regional Indian market, shipping volumes of o-Nitro Toluene have decreased by 2.1%, according to sources.
Excess inventories along the entire supply chain have severely impacted the global freight industry. The shift in consumer and business spending from merchandise to services in the region has contributed to this situation. As a result, the market for o-Nitro Toluene has been affected by reduced shipping volumes and disrupted freight dynamics.