Domestic chemical prices Shoot Up 20% On Back Of Volatile Crude Prices

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Mumbai, May 2: The deepening crisis in Iraq has resulted in crude oil prices climbing to $37.72 per barrel, up from around $30 per barrel six month back. Over the past six months, the crude oil prices have risen by almost 20 per cent.

The volatile crude oil prices in the international markets have given a leg up to the chemical prices in the domestic markets. Coupled with higher demand across-the-board and the pre-seasonal time for agro-chemicals, prices of a wide range of chemicals — organic and inorganic — have risen by around 15-20 per cent over the last few months.

On Friday, international crude oil prices marginally up by 41 cents to $37.72 a barrel, after sliding to $37.10 per barrel. However, it had reached a 13-month high of $38.30 on April 19, 2004. Even, London’s Brent crude stood at $34.75, up 37 cents on Friday. Brent hit $34.90 on Wednesday, its highest since October 2000.

On the international front, reports are emanating about China’s measures to slow down its sizzling economy and cool its soaring demand for oil. This had pulled down prices in the last week, but after looking at US gasoline stock requirement, crude prices have firmed up.

The International Energy Agency (IEA) had on last Thursday urged OPEC to boost production limits at its June meeting to help top-up world oil inventories, but Venezuela said there were no plans to do so.

Meanwhile, the climb in the crude oil prices was reflected in the price rise of wide range of chemicals in the local market. This price rise is likely to increase in the first week of May, due to higher crude oil and higher demand in the local market.

On Friday, Toluene was quoted at Rs 27.5 per kg (plus duty and taxes) against Rs 24 per kg (plus tax and duty) in March, indicating a jump of around Rs 3.5 per kg, Benzene was quoted at Rs 29.50 per kg (plus duty and taxes) up from Rs 25 per kg (plus taxes and duty), and Xylene was quoted at Rs 38 per kg (plus duty and taxes) up from Rs 32 per kg. Prices of other chemicals like MEG, EDA, TETA, DCDA, Acrylic Acid, Blue wax, Formic Acid too have jumped by around 15-25 per cent.

Chemical & Alkali Merchant‘s Association (CAMA) vice-President, Jayant Tolia, said: “During the last couple of months, prices escalated in line with international crude oil price.”