09 May 2008 14:13 [Source: ICIS news]
By Isha Jha
MUMBAI (ICIS news)--Indian chemical companies are likely to benefit from China's restrictions on chemical production in order to control pollution levels during the Olympic Games, producers and analysts said on Friday.
“The domestic price for banned chemicals in ?xml:namespace>
The regulation on the production of 257 chemicals in
This move is aimed to ensure that pollution would be curbed ahead of the country’s showpiece Olympic Games in August.
The average import duty on chemicals in
“This move would result in an increase in production costs and a gap in the supply chain which
“If the prices in
“The ruling is likely to raise prices and demand of chemicals in the region due to short supply,” said Pranay Bhargava, chief economist at the National Commodity and Derivatives Exchange.
ABS prices rose to the range of $1,810-1,850/tonne (€1,158-1,203/tonne) CFR (cost and freight) China by the end of first week of May compared with $1,800-$1,830/tonne a month ago.
PS also rose to $1,500-$1,520/tonne compared with $1,470-1,485/tonne a month-ago, according to global chemical market intelligence service ICIS pricing.
There could only be limited exposure to the Chinese customers as the Indian companies are increasingly adopting the strategy of diversifying their markets to other regions to minimise risk, Bhargava added.
“In commitment to supply to their customer base in Middle-East, Europe and America, the Indian companies could only increase their supply into the Chinese market by about 5-7%, despite the increased demand in the region,” he said.
Chinese producers do not seem to fear a strong supply crunch.
“Every year in
“It's only in the month of November and December that most companies produce near full capacity,” he added.
Import and margins into China were increasingly under pressure due to the rise in crude levels, and this ban would further aggravate the crunch, players said.
“Following the ban, prices of raw material chemicals in India imported from
($1 = €0.65)
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