The outbreak in India is out of control, what is the impact?

Chem366—

Since April 21, the number of single-day confirmed cases of the new crown epidemic in India has remained above 300,000; on April 26, India had 319,000 new confirmed cases, accounting for 48.4% of the world’s new confirmed cases on that day. During the two major festivals of the recent Indian Holi Festival and the Kumbh Festival, large gatherings of local residents did not take effective epidemic prevention measures, which further exacerbated the spread of the local epidemic in India.

Chemicals and petrochemicals

In such a severe situation, the epidemic in India has had a great impact on imports and exports. Data show that the epidemic has severely affected the decline in the import and export of chemical products. According to the 2020-21 annual report of the Department of Chemistry and Petrochemicals (DCPC) of India, due to the impact of the new crown epidemic, the import and export volume of various chemicals and chemical products in India has dropped significantly year-on-year. According to the data disclosed by DCPC, from April to September 2020, India’s total import and export of chemicals and petrochemicals decreased by 33.0% and 20.6% year-on-year, respectively. Among them, the import and export volume of tanning dyes and man-made fibers fell particularly seriously. The total import and export volume of tanning dyes decreased by 41.7% and 37.4% year-on-year respectively, and the total import and export volume of man-made fibers decreased by 62.9% and 61.7% year-on-year respectively.

crude oil

The epidemic situation in India continues to worsen, and oil demand may be dragged down. India is the world’s third largest importer of crude oil and a major oil consumer. As one of the world’s major oil consumers, India has been in an epidemic crisis for several consecutive days, and the market is skeptical about the recovery process of global oil demand. Affected by the new crown epidemic, crude oil prices fell sharply, and downstream demand fell short of expectations.

Pesticides

If the production of pesticides in India is affected by the epidemic, it will be good for domestic pesticide active pharmaceutical companies. If the impact of the epidemic continues, the global supply side of related pesticide varieties will shrink, and the price of related pesticides is expected to gradually rise in the short term, and pesticide orders are expected to shift to domestic companies. In 2019-20, India has a total pesticide production capacity of 334,000 tons, achieving a pesticide production of 192,000 tons, a year-on-year decrease of 11.3%. In addition, if the epidemic in India continues to affect, the supply of dyes and pigments in India will also be affected, but the downstream demand for dyes in other parts of the world is gradually recovering, and demand orders are expected to shift to domestic companies.

chemical fiber

In the chemical fiber industry, both negative and positive factors coexist. India is the world’s second largest textile manufacturer and exporter after China. As the epidemic worsens, the start of operations of local textile enterprises in India will be significantly affected. At present, a large number of European and American textile orders have been transferred. Chinese enterprises have received Return order. The increase in the number of orders from downstream textile enterprises will obviously boost the prosperity of the upstream chemical fiber industry, and the purchase quantity of domestic chemical fiber and other raw materials is expected to increase. But at the same time, India itself is also a country with a large demand for the textile and apparel industry due to its large population. If the epidemic situation continues to worsen and the Indian government begins to restrict the movement of people, it will cause a decline in India’s own textile and apparel demand, and the overall order for textile and apparel will decrease. As a result, downstream companies are less motivated to purchase raw materials, resulting in a backlog of inventory in upstream companies, and are forced to cut prices and promote sales, affecting their own profitability.