On Wednesday’s trading sessions, chemical stocks garnered attention due to a surge in prices. Here is the Impact of Isreal-Palestine War on Chemical Industry In Global Markets. Analysts suggest that the recent rise in bromine prices can be attributed to rising geopolitical tensions resulting from the Israel-Hamas war. Israel, being the world’s largest producer of elemental bromide, is expected to impact bromine prices. Several companies, including Tata Chemicals Ltd, Aarti Industries Ltd, Atul Ltd, SRF Ltd, GHCL Ltd, and Vinyl Chemicals Ltd, witnessed gains ranging from 1% to 4% on Wednesday’s trade.
JM Financial, in its report, mentioned that the ongoing situation in Israel introduces uncertainty regarding bromine production, export, and sales, as Israel plays a significant role in the bromine market. The Dead Sea, one of the world’s largest salt pans, contributes around 50–55% of the world’s bromine capacity. Seawater bromine manufacturers have experienced lower operating costs, leading to a 40% increase in bromine prices since June 23.
The report further highlighted that Israel supplies approximately 30% of the world’s bromine, and potential export disruptions could cause prices to rise from the current USD 3.5/kg.
Additionally, the brokerage believes that Archean, which produces bromine from the Rann of Kutch, is likely to benefit from the increased bromine prices and the introduction of certain bromine derivatives in the second half of FY23.
The report also noted that benzene prices increased by around 20% on October 23, affecting companies like Deepak Nitrite, Aarti Industries, and Atul, which rely on benzene as an essential raw material. Toluene prices have also risen by approximately 6% in the same timeframe, impacting companies like Atul, Deepak Nitrite, and Aarti Industries.
Moreover, phenol-acetone spreads over benzene-propylene increased by 38% in the last three months due to significant price increases in phenol and acetone (around 30%) compared to a more modest 15% increase in propylene pricing. The brokerage anticipates positive surprises in Deepak’s phenolics business from the second quarter of FY24 as phenol spreads are likely to have troughed.