C9 Solvent Prices Dip Amid Heavy Rains and Construction Slowdown in India

In the first half of July 2024, the Indian market for C9 Solvent experienced a downturn with a 2.3% decline in prices, primarily due to reduced demand for C9 Solvent from the downstream construction industry. Heavy rainfall halted construction activities, impacting the C9 Solvent demand within the country despite ample supply availability. Over the course of the month, however, the price of the C9 Solvent stabilized in June 2024, supported by a balanced equilibrium between demand and supply. Amid persistent inflationary pressures, India's manufacturing sector witnessed a robust surge, marked by the fastest pace of hiring in over 19 years, driven by strong demand dynamics.

During this period, the supply of C9 Solvent in the country remained moderate, with no reports of supply shortages. The stability in feedstock crude oil prices throughout June contributed to a consistent pricing trend of C9 Solvent over the month. However, recent developments saw a sharp rise in freight charges, driven by the early onset of the peak season for ocean freight and disruptions from diversions in the Red Sea, alongside shortages of equipment that exacerbated port congestion issues. This surge in freight costs added complexity to long-term contracts, as spot rates soared significantly, increasing the likelihood of cargo being prioritized based on profitability rather than contractual agreements.

During this period, demand for C9 Solvent in the construction sector remained low due to heavy rainfall across large parts of India. The abundant precipitation effectively erased the June deficit, shifting the overall monsoon precipitation into surplus territory. Since the onset of the four-month monsoon season on June 1, the country has received 214.9 mm of rainfall, slightly exceeding the normal average of 213.3 mm, according to data from the India Meteorological Department (IMD). Northwest India and the southern peninsula reported rainfall levels 3% and 13% above normal, respectively. In the east and northeast regions, heavy rains significantly reduced the earlier deficit from 13% on June 30 to zero by July 6. Similarly, central India saw its deficit decrease from 14% to 6% during this period. IMD data indicates that 23% of the country's sub-divisional areas received excess to large excess rainfall, while 67% received normal rainfall, with only 10% experiencing deficient rainfall. These weather conditions directly impacted the construction industry's demand for C9 Solvent, as ongoing projects were affected by the heavy rainfall, leading to reduced demand for construction-related materials and chemicals such as C9 Solvent.