The decline in prices is due to an oversupply situation and sluggish demand in the international market. Reportedly, MAN plants in Europe, the US and Indonesia, which were shut down earlier, have resumed production.

Domestic prices of MAN (Ganesh Anhydride) declined from Rs 33,000-34,000 per tonne in April 1999 to Rs 30,000 per tonne in early May 1999.

Thirumalai Chemicals and Ganesh Anhydride operated their plants at full capacity, while Mysore Petrochemicals' operations continued to be adversely affected due to the shut-down at one of its PAN units of IG Petrochemicals. (Mysore Petrochemicals produces MAN through the PAN recovery route.)

Domestic demand for MAN was steady in April 1999, and is expected to improve in the second quarter of 1999-2000, due to the start of the agrochemical season and higher offtake from the food acids sectorduring the summer season.

In April 1999, average margins of MAN producers (MAN price less benzene cost) declined by Rs 2,400 per tonne, to Rs 14,700 per tonne, due to the decline in the domestic prices of the chemical. Margins are expected to decline further, due to the continued decline in MAN prices and firm prices of benzene.

(This report is a part of `Pricewatch', a monthly commodity report prepared by INFAC, a leading Indian industry information research firm. For further information on the subject visit: www.infac.com)