Petrochem prices plunge in line with crude oil

Following a sharp fall in crude oil prices, those of derivatives such as chemicals and solvents have also taken a hit. Benzene and phenol prices have almost halved; those of acetone, an important solvent, have fallen by 30 per cent.

Producers of these commodities say they’re incurring loss, being forced to sell at lower prices.

According to data from Platts, a global commodity information provider and publisher of benchmark price references, benzene was quoted at $1,356 a tonne in the beginning of August. Last week, it was being quoted at $646. Benzene is produced from naphtha, which is made from crude oil. Phenol and acetone are produced from benzene and propylene. Phenol was $1,620 a tonne in early August and $850 last week.

In India, phenol producers are cutting capacity, saying demand had stagnated. Janak Ladhani, managing director of Sonkamal Enterprises, said: “Consumers are waiting for prices to stabilise before they start buying.”

Several plywood makers have phenol stocks bought at higher prices. They are also facing low demand, due to a slump in the housing sector. Its price in India has come down from Rs 130 a kg to Rs 82. One phenol producer has temporarily halted production due to low demand.

Acetone is down from Rs 76 to Rs 66 a kg. Naphtha in India is down 28 per cent, at Rs 46,988 a tonne.