Chemicals like Phenol, Methanol and Melamine play significant role in the input cost of High Pressure Decorative Laminates. Since last 3 months these chemical prices have been hovering in the comfort zone, which is helping HPL producers with the capacity of more than 3 lakhs sheets every month. Whereas the HPL companies manufacturing around 1 lakh sheet per month capacity are not able to take advantage of softening chemical prices.
It has been reported that the rates of phenol and methanol have been maintained at a lower figure since last 3 to 4 months with formaldehyde prices reaching a single digit number. Phenol prices have gone down to below 70 levels, which is the least this year. Chemicals contribute around 45 percent of total input cost of HPL.
Experts say that the softening chemical prices are helping companies that are producing more than 3 lakhs sheets every month because there is oversupply scenario in the market; the price war like situation is seen in some categories. The liner laminate prices are facing a tough competition in market because the production of these laminate categories has registered 25 to 30 percent growth. As per market survey, nearly 1 crore of these laminate catergory are being consumed in the Indian market per month.
Experts also opine that the companies having only one press manufacturng capacity are not able to get advantages of softer chemical prices because there is tough competition both in 1 mm and liner grade. New emerging 0.92 mm and 0.72 mm laminates do not help manufacturers in terms of profit margin but in terms of sustainability.