International and domestic prices of petrochemical products like naphtha, purefied terephthalic acid and mono-ethyline glycol, which had peaked in March with the increase in the political instability in Iraq, have dropped in the last few weeks with the end of the war.
In April all petrochemical products have seen a price drop of about 20 per cent (compared to March prices). Sectors like fertiliser which are fuel-dependent on naphtha have also seen a drop in prices in April.
The prices of the petrochemical products are directly linked with the crude oil price, which is currently estimated at $25.67 per barrel from $33.96 per barrel in March.
Industry analysts said that the prices of the petrochemical products have fluctuated with sentiments linked to war in Iraq.
"The prices started dropping once the war began with the forecast that it would not last too long. We are relieved that the fuel prices are dropping to the earlier level," explained Uttam Gupta, chief economist,
Fertiliser Association of India. The fertiliser sector is one of the largest consumers of naphtha.
At present, naphtha price in the international market was around $250 per tonne, on par with January price. Global price of naphtha had skyrocketed in March touching over $300 per tonne on war fears.
In the domestic market naphtha was around Rs 15,500 per tonne and likely to be stable. In March the price had touched about Rs 20,000 per tonne.
Similarly, PTA prices have also seen a drop from March onwards.
International PTA prices had peaked in February touching $763.75 per tonne while it dropped to $720 in March with the beginning of the war nd now the prices have significantly dropped to $577.50 in April.
MEG prices have also come down to $622.92 per tonne.
Asked whether the prices would drop further, an analyst said, "It may further dip marginally as supply will gradually ease now."
The international price of urea has also dropped from $160-170 per tonne to about $140 per tonne with the end of the Iraq war. It was likely to drop further in the next couple of weeks and then stabilise at about $130 per tonne.
