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|March 01, 2001||Feedback|
Sector Focus: Downstream Petrochemicals
Downstream petrochemicals: State of the industry (2000-01)
Downstream petrochemicals : Tariffs, prices and landed costs
PAN: Phthalic anhydride; MAN: Maleic anhydride; CBFS: Carbon black feedstock; VAM: Vinyl acetate monomer
n.a: Not available
1 Fob prices
Notes: BR> 1) Landed cost of phenol includes a safeguard duty of 15 per cent.
2) Landed cost of acetone includes a safeguard duty of 28 per cent.
Source: CRIS INFAC
Downstream petrochemicals: Budget Impact
Figures in brackets indicate the closing share prices, on February 27, 2001 and February 28, 2001, respectively.
neg= negative neut= neutral
Source: CRIS INFAC
A: Custom duty
A: The reduction in the effective customs duty on downstream petrochemicals (due to the removal of surcharge), is expected to have a negative impact on downstream petrochemical producers. Domestic prices of downstream petrochemicals are expected to decline, due to a decline in the landed costs.
B: The reduction in the effective customs duty on downstream petrochemical feedstocks is expected to have a positive impact on downstream petrochemical producers. (On an average, raw material costs account for 40 per cent of the total production costs.) The overall impact on most downstream producers is expected to be marginal due to the relatively low (10 percent) customs duty differential between finished products and raw materials. However, this is expected to have a negative impact on the profitability of producers such as Thirumalai Chemicals, as their customs duty differential is around 20 per cent.
C: The reduction of surcharge on corporate tax, from 13 per cent to 2 per cent and the expected decline in interest rates, is expected to have a positive impact on producers.
D: The reduction in effective customs duty on MEG is expected to have a negative impact on India Glycols.
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