Amine manufacturers such as Balaji Amines and Alkyl Amines are headed for their best year yet in terms of both margins and volume growth, even as Middle East-driven raw material volatility threatens to squeeze other segments of the chemical sector, according to Ajay Joshi, founder of Ajay Joshi Chemicals.
Speaking to NDTV Profit, Joshi explained that the sector was witnessing an unusual, favourable alignment for amine players: input costs are falling even as output prices stay elevated. "The raw materials, methanol, ammonia have corrected from the war premium. They are now not at pre-war level, but considerably cheap and abundantly available," he said.
At the same time, he noted, "the products of these amine companies are still selling at a premium price because globally there are structural supply issues with regard to amines," pointing to disruptions in Saudi Arabia and at Germany's BASF.
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This combination, he said, of cheap inputs, tight global supply and a domestic anti-dumping duty on acetonitrile, a segment where Balaji and Alkyl are key players, has made the outlook exceptional. "This year is going to be a blockbuster year in terms of margins, in terms of volume growth," Joshi said.
The picture looks very different, however, for companies dependent on sulfur and sulfuric acid, whose prices have surged since February.
"Sulfur, sulfuric acid consumers in India, particularly fertiliser companies, agrochemical companies or dyes and pigment manufacturers, they will suffer this year also," he said, noting that sulfur prices had jumped from $150-200 a tonne in February to between $1,000 and $1,300 currently.
Asked which companies were best placed to weather this volatility, Joshi pointed to contract manufacturers with the ability to pass on rising costs, naming Aether Industries, Anupam Rasayan and Navin Fluorine as well positioned.
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Surfactant makers such as Galaxy Surfactants and Rossari Biotech, by contrast, would likely struggle, he said, since their FMCG clients are more price-sensitive and less willing to absorb cost increases.
On the capacity front, Joshi flagged PVC as a segment worth watching, with Reliance and Adani both entering the space in a big way to cut India's reliance on imports.
He also pointed to a broader push into DME for fuel blending, led by Balaji Amines' newly commissioned, largely sold-out capacity.
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