The Iran-Israel-US war has entered its 10th day and the Strait of Hormuz, a critical trade route, remains shut for the sixth consecutive day. This has resulted in a surge in oil prices and a sell-off across global markets. As tensions in the Middle East continue to escalate, trade is disrupted, and chemical stocks are in focus as they declined up to 4% on Monday. Here’s a roundup of the chemical firms and the impact they may see due to the ongoing conflict, according to brokerage firm IIFL.
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1 / 8The Iran-Israel-US war has entered its 10th day and the Strait of Hormuz, a critical trade route, remains shut for the sixth consecutive day. This has resulted in a surge in oil prices and a sell-off across global markets. As tensions in the Middle East continue to escalate, trade is disrupted, and chemical stocks are in focus as they declined up to 4% on Monday. Here’s a roundup of the chemical firms and the impact they may see due to the ongoing conflict, according to brokerage firm IIFL:
2 / 8Coromandel International | Phosphoric acid and sulphur are the primary inputs for the company’s raw material supply. Iran is among the top three global suppliers of sulphur. Almost all phosphoric acid and sulphur move via the Strait of Hormuz. The same are crude-based intermediates.
3 / 8Deepak Nitrite | The company’s raw materials propylene derivative and ammonia supply could get impacted due to the disruption in trade post the war. Its exports are largely nil. However, propylene and benzene derivatives are crude linked.
4 / 8Atul | The company has a huge raw material basket with quite a lot of exposure to the Middle East. Freight impact will include exports to Europe and US across segments. When it comes to crude oil, the company has broad product basket sensitivity across the portfolio.
5 / 8Aarti Industries | While its raw material benzene is locally-sourced, procuring aniline would be difficult, as per IIFL. Its exports to Middle East account for 23% while to Europe are 4%. Crude derivatives such as benzene are raw materials.
6 / 8GSFC | The company was procuring natural gas from GAIL and Petronet LNG. However, GAIL has cut its allocation. Meanwhile, it imports sulphur from Iran. Its caprolactam feedstock is linked to crude linked.
7 / 8SRF | The company is relatively insulated in the refrigerant gas chain, when it comes to raw materials, IIFL stated. All three of its segments export to the US and UK. Packaging films use crude derivatives as raw material.
8 / 8Minimal to no impact | Navin Flourine, Tata Chemicals, Archean Chemicals, Rallis and Anupam Rasayan are among the stock with minimal to no-impact due to the war
