On 1st Nov, Deepak Nitrite’s wholly-owned subsidiary started production of phenol and acetone at its mega plant, which is equipped to manufacture 2,00,000 MTPA of phenol and 1,20,000 MTPA of its co-product acetone. This is supported by the capacity to manufacture 2,60,000 MT of Cumene for captive consumption.
And on the back of this, there is a report put out by Bloombergquint that prices of China phenol, which were soaring in September to almost four-year highs are now down. Prices of phenol move in tandem with crude. From 1st Nov till date, which is just 6 days, China phenol prices have already fallen 27% from Rs.1.3 lakh.mt to Rs.94,740/MT. In rupee terms, there has been a 7% drop.
This fall in price, coinciding with the beginning of the new plant has depressed the stock price of Deepak Nitrite. The scrip today fell over 6% to Rs.228.55 and its 52-weel low is at Rs.200.05.
Those in the chemical industry say that the price downtrend since October might not be reversed given volatile global political and economic environment, the stronger US dollar and falling crude oil values.