There is huge global shortage of Benzene, which is a key raw material for many downstream chemicals, thus making prices of those chemicals seeen risen by over 100% across the board, in last 3-4 months. Reasons for sharp rise in Benzene prices are non operation of Crude Refineries, in Africa, Europe and U.S.A. to their rated capacity, while Refineries from China and Korea are unable to cope up with the global demand. Generally, to ramp up or stabilise production at refineries, it requires minimum 3-4 months to get an uniterrupted supply of Crude and Manpower, failing which, they run at much lower rated capacity.
Few beneficiaries of these rising product prices are GSFC, making Caprolactum, raw material of which is Benzene. Caprolactum is a raw material for making Nylon 6, which has varied uses in Automobile (Tyre making), Railway, Defense, Components for Appliances and Consumer Goods. Major portion of price increase is seen getting added in bottomline, which will be reflected in Q4 numbers. On top of it, Anti Dumping Duty for import is seen to be an icing on the cake.
GNFC is seen another beneficiary, making Acetic Acid, where realisatons have alomst tripled in last couple of months. Acetic Acid is a raw material for making TPA, which is a raw material for making PET. Nitobenzene and TDI are other few products made by GNFC, having same fate of rising prices. On top of it, Anti Dumping Duty for import is seen to be an icing on the cake for all these products.
Hence it is moolah time for Benzene based chemical makers, in which GSFC & GNFC seen to be two bigger beneficiaries.
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