A moderation in different chemical prices of has been witnessed with the opening of the Strait of Hormuz, following the peace agreement between US and Iran. Over the last 3-4 months, the prices of the chemicals such as Formaldehyde, Phenol, Melamine & Urea were reported to be highly volatile amidst the prolonged conflict in west Asia that sabotaged the functioning of global supply chains.
Earlier during conflict, the inflated prices of aforementioned chemicals/raw materials with Phenol breaching Rs 160 from Rs 85 , Formaldehyde touching Rs45 from Rs 14 and Melamine crossing 135 from Rs 88/kg, added the input cost of the making MDF, laminates and other panel products which had forced the producers to pass on the additional production cost in the market to maintain the quality of the products.
But now after the news of the US-Iran peace treaty and the resumed functioning of supply chains, the price of Formeldehydehas moderated to Rs 23-24/kg while Phenol and Melamine have softened to Rs120 & Rs 100/ kg respectively, as per the information from the chemical suppliers in India.
The slip in the pricing of chemicals may create a space for price correction across panel product segments.