Chemical Prices Inching Up, Caution for Laminate Industry

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The prices of Phenol, Methanol and Melamine have begun climbing upward that will certainly jeopardize the balance sheets and present comfort zone for many laminate producers. The prices of all three chemicals, reported an increase between 7% to 14% during middle of December month. Resultantly the input cost per laminate sheet for a manufacture can climb up by 3 to 5%. In case of liners or balancing sheets where margins are too thin to absorb any price rise, the equation could disrupt the comfort zone in which around 70 odd laminate manufacturers are cozying in since almost 6 to 7 months. There have been shut down in formaldehyde plants that may be momentary but it created a short fall in formaldehyde supplies too, following this formaldehyde prices shot up by a couple of rupees for north based manufacturers. It is known that prices of phenol is very vital for Indian laminate manufacturers, and phenol has been floating on very reasonable levels that has helped the laminate companies to sustain the weak market conditions.

Since there is an anti-dumping move initiated on Phenol in India, the importers have begun flexing their muscles with phenol prices. Any price rise in Phenol or other raw materials will lead to challenging situation for especially laminate industry because there is no room for any price increase due to oversupply scenario, if Raw material cost need to be passed on.

It is feared among the trade circles of chemical suppliers that with any disturbance in global scenario in relation to US-IRAN or truce between US-China trade war, there will be some fall back for phenol prices and will be pushing up the phenol prices or disturbing phenol supplies. Chemical importers are of view, that the good days of RM cost are soon to be approaching towards an upward phase and manufacturers must be preparing some room or some plan for the passing on these chemical prices to their buyers.

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