The shares of several leading fertiliser and chemical companies saw a significant surge, with some rising up to 9 percent, as soda ash prices experienced a sharp rise in global markets.
Soda ash is a vital raw material for industries such as glass manufacturing, detergents, and chemicals. As its prices rise, it benefits domestic producers, who are able to see improved revenue and profit margins.
Government Policy on Soda ash Import
The rise in soda ash prices is driven by a major policy change from the Indian government. In December 2024, the Directorate General of Foreign Trade (DGFT) announced the implementation of a Minimum Import Price (MIP) for soda ash, set at Rs 20,108 per metric tonne.
This change aims to protect domestic soda ash producers from the impact of falling global prices and stabilize the local market. Soda ash prices had fallen more than 30 percent YoY through 2024.
Emkay Global’s report on soda ash prices
Emkay Global’s latest report says that soda ash prices might have reached their lowest point and could start to recover soon. The government’s decision to set a minimum import price (MIP) and limit imports until July 1, 2025 (with possible changes) is expected to help local soda ash producers and boost the chemical sector.
This change has already caused stock prices of chemical companies to rise by up to 9 percent. Experts believe the sector will continue to grow as soda ash prices recover, improving profits for chemical and fertiliser companies.
As the market adjusts to these changes, the chemical sector is attracting a lot of attention, with investors closely watching how the new policies will affect the industry in the coming months.
The List of stocks to Benefit from this
Gujarat Heavy Chemicals Ltd (GHCL)
With a market capitalization of Rs. 6,508.45 crores, the shares of Gujarat Heavy Chemicals Ltd is up by 9 percent making a high of Rs. 734.95 per share compared to its previous closing price of Rs. 679.55 per share.
Gujarat State Fertilizers & Chemicals Ltd (GSFC)
With a market capitalization of Rs. 7,756.37 crores, the shares of Gujarat State Fertilizers & Chemicals Ltd is up by 9.35 percent making a high of Rs. 212.70 per share compared to its previous closing price of Rs. 194.55 per share.
Rashtriya Chemicals & Fertilizers Ltd
With a market capitalization of Rs. 9,102.89 crores, the shares of Rashtriya Chemicals & Fertilizer Ltd is up by 5.75 percent making a high of Rs. 173.80 per share compared to its previous closing price of Rs. 164.95 per share.
Fertilizers & Chemicals Travancore Ltd
With a market capitalization of Rs. 58,754 crores, the shares of Fertilizers & Chemicals Travancore Ltd is up by 9 percent making a high of Rs. 991 per share compared to its previous closing price of Rs. 908 per share.
Written by Sridhar J
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