According to ChemAnalyst report, “India Liquid Chlorine Market: Plant Capacity, Production, Operating Efficiency, Technology, Process, Demand & Supply, Application, End Use, Distribution Channel, Region, Competition, Trade, Customer & Price Intelligence Market Analysis, 2015-2030”, India’s Liquid Chlorine market is anticipated to grow at a healthy CAGR of 6.2% during the forecast period on account of rising demand for Polyvinyl Chloride (PVC) pipes, electrical wires and tubing from the construction sector due to rapid urbanization supported by factors like the Indian government’s Smart City Mission. Moreover, rising Liquid Chlorine and Chlorine derivatives demand from the pharmaceutical and agrochemical industries is likely to give a boost to the Liquid Chlorine industry over the coming years.
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Caustic soda and Chlorine are produced as the co-products in the electrolysis of sodium chloride solution. More than half of the Liquid Chlorine produced in the country is used for the production of PVC resins which are used for manufacturing pipes & fittings for use in Agriculture & Construction sectors in India. The continued focus of the Indian government on the development of infrastructure such as the development of Smart Cities, rural housing, Agricultural-assets and other initiatives like investments in rural sanitation are expected to fuel growth of the PVC industry in India over the next several years. PVC is also used in automobile, packaging, electrical/electronic and healthcare applications. These factors will dominantly drive the Liquid Chlorine market in the forecast period. Other key drivers for growth of the Liquid Chlorine demand are the use in Chlorinated Paraffin Wax (CPW) which impart flame retardant properties to the PVC products and for manufacturing of pesticides and insecticides such as BHC and DDT. Demand for Liquid Chlorine derivatives like Chloromethanes which are widely used in pharmaceuticals, and refrigerant gases will further propel the Liquid Chlorine market in the forecast period.
However, sudden outbreak of COVID-19 which led to extended national lockdown in India, severely affected the Chlor-Alkali industry which remained hard hit as construction activities remained stalled for most of Q4 FY20. Battered by the demand downturn, several Chlor-Alkali producers like GACL, Grasim and Meghmani had to shut their manufacturing units while others announced operational cuts up to 40% to deal with lengthening inventories. Chlorine prices are strongly driven by the domestic demand-supply factors, hence local players reported contracted margins throughout the fourth quarter. However, strengthening consumption of Liquid Chlorine for water treatment purposes due to government’s active measures to maintain safe hygiene practices during the pandemic, supported the stable price trend. Moreover, with ease in lockdown restrictions and resumption of downstream activities, demand for Liquid Chlorine and its derivatives is expected to rise to appreciable levels.
According to ChemAnalyst report, “India Liquid Chlorine Market: Plant Capacity, Production, Operating Efficiency, Technology, Process, Demand & Supply, Application, End Use, Distribution Channel, Region, Competition, Trade, Customer & Price Intelligence Market Analysis, 2015-2030”, major players operating in India’s Liquid Chlorine market are Gujarat Alkali and Chemicals Limited, Grasim Industries Limited, DCM Shriram Consolidated Limited, Meghmani Organics Limited, Tata Chemicals Limited, Nirma Limited, Chemplast Sanmar Limited, Sree Rayalaseema Alkalies And Chemicals Limited, Chemfab Alkalis Limited and Lords Chloro Alkali Limited. In FY19, DCM Shriram Ltd. commissioned a 60 TPD Aluminium Chloride plant at Bharuch with an investment of about INR 31 crore in order to expand the portfolio of its Chlorine downstream products. Similarly, several Indian companies are planning to improve capacity utilizations in the coming years with gradual improvement in the domestic Liquid Chlorine market with addition of downstream industries.
“Since Liquid Chlorine is a bulk commodity, its demand has been strongly driven by the domestic demand-supply scenario. A big drop in India’s GDP due to economic slowdown caused due to the COVID-19 crisis is indicative of lesser downstream demand in the next few quarters. However, as the Indian construction industry is expected to reach $738.5 bn by 2022, the Liquid Chlorine demand forecast for manufacturing PVC resin seems highly optimistic. However, challenges associated to the storage and transportation of Liquid Chlorine make the domestic Chlor-Alkali producers run their plants based on the local Chlorine demand. Hence, if Chlorine demand rises, they would simultaneously have to rise the volumes of Caustic Soda which is its co-product. The vinyl industry is the single largest consumer of Chlorine produced in India and hence increasing downstream investments can offer valuable options and be the key drivers for the Liquid Chlorine market in the forecast period. Moreover, since most of the Chlorine production is “localized”, encouraging local entrepreneurs to explore possibilities like investment in Chlorine Derivate products like Chlorinated Paraffin Wax (CPW) will further expand the domestic Liquid Chlorine industry. Since acute volatility in its prices is one of the key concerns of domestic Liquid Chlorine producers, it is important to understand the market dynamics and the associated threats that may hamper the profitability of the Chlor-Alkali companies.” said Mr. Karan Chechi, Research Director with TechSci Research, a research based global management consulting firm promoting ChemAnalyst.
Source : ChemAnalyst