Indian PA trade halted as country enters quarantine; outlook grim

SINGAPORE (ICIS)–India’s phthalic anhydride (PA) import discussions and domestic trade grinded to a halt this week as a 21-day quarantine was imposed from 25 March to break the coronavirus spread.

India’s government has warned the lockdown may be extended further if the virus situation warrants so, which will keep PA market in suspension as end user demand has come to a stand still.

The death toll due to COVID-19 rose to 16 in the country and with 80 fresh cases reported India’s total tally was 694 on Thursday. Worldwide, the disease has infected nearly over half a million people.

With downstream production fully suspended, “it is meaningless to engage any seller, be it for imported materials or domestic products”, a plasticiser maker in the country said.

PA is mainly used in India for producing plasticisers, coatings and dyes – all sectors which are shut as well from 25 March.

This is another blow for imports sellers, many of whom have watched nervously, and yet helplessly, PA import prices plummet recently on the back of grim global economy and crumbled crude futures.

On 20 March, CIF (cost-insurance-freight) Indian prices averaged only $720/tonne, nearly $100/tonne below where the month started, ICIS data shows.

Earlier this week, to induce buying, some sellers moved import offers another notch lower, to $700/tonne CIF India or below, market sources said.

Domestic PA trade is also disrupted by the lockdown.

Although these being “continuous processing units”, PA plants could continue to operate during the quarantine, they are likely to shut soon too, given that manpower is short, deliveries of feedstock challenged, and most importantly, demand is “dead” – as one domestic producer put it.

Local producer Thirumalai Chemicals is preparing to turn off its 144,000 tonnes/year unit in Ranipet in a few days’ time, once necessary preparations, such as converting existing molten stocks  into briquettes, and building some stocks, are completed.

The firm is planning to build about 20 days to a month’s worth of inventory, according to a company source.

Focus article by Ai Teng Lim