Tata Chemicals shares gain as American Natural Soda Ash Corporation hikes price
Tata Chemicals Share Price | With ANSAC raising rates, Tata Chemicals may find an opportunity to follow suit, which could enhance their revenue without losing competitive positioning, given the overall market trend of tightening supply and increasing demand, according to Centrum.
Tata Chemicals shares gained more than 2% on Tuesday, June 11, after the American Natural Soda Ash Corporation (ANSAC) announced that it is raising export prices by $25/MT from July 1.
With ANSAC raising rates, Tata Chemicals may find an opportunity to follow suit, which could enhance their revenue without losing competitive positioning, given the overall market trend of tightening supply and increasing demand, according to Centrum.
This development could be a positive indicator for Tata Chemicals' financial performance and market positioning in the near future, it said.
Tata Chemicals exited ANSAC in December 2022, indicating that they have been independently managing their soda ash sales and distribution.
If Tata Chemicals increases its soda ash prices in response to ANSAC's hike, it could see improved margin and revenue. The price increase reflects a recovery from previously low price levels caused by oversupply and weak demand, Centrum said.
ANSAC announced a price increase of $25 per metric ton (MT) on all non-contract soda ash sales, effective from July 1, 2024. This price hike also applies to contracted sales where the contracts permit adjustments.
This decision comes as a response to a tightening global soda ash supply environment, which has led to increased demand.
ANSAC's decision reflects a broader trend of tightening supply in the global soda ash market. Factors contributing to this include increased demand and possibly reduced production capacities or supply chain disruptions.
Historically, the US natural soda ash prices have been under pressure due to several factors such as China's synthetic capacity that led to increasing global supply, lower consumption in Europe leading to excessive supply, and material flow from Europe to Asia.
European producers have redirected their supply to Asia, further intensifying competition and suppressing prices.
Shares of Tata Chemicals were trading 2.35% higher at ₹1,111.85 apiece on the BSE around 10.03 am.
Also Read: HUDCO shares jump 17% in two sessions; What's the key trigger? Explained
With ANSAC raising rates, Tata Chemicals may find an opportunity to follow suit, which could enhance their revenue without losing competitive positioning, given the overall market trend of tightening supply and increasing demand, according to Centrum.
This development could be a positive indicator for Tata Chemicals' financial performance and market positioning in the near future, it said.
Tata Chemicals exited ANSAC in December 2022, indicating that they have been independently managing their soda ash sales and distribution.
If Tata Chemicals increases its soda ash prices in response to ANSAC's hike, it could see improved margin and revenue. The price increase reflects a recovery from previously low price levels caused by oversupply and weak demand, Centrum said.
A unified price increase by major players like ANSAC and potentially Tata Chemicals suggests a stabilisation in the soda ash market. This stability is crucial for maintaining profitability and planning long-term investments.
ANSAC announced a price increase of $25 per metric ton (MT) on all non-contract soda ash sales, effective from July 1, 2024. This price hike also applies to contracted sales where the contracts permit adjustments.
This decision comes as a response to a tightening global soda ash supply environment, which has led to increased demand.
ANSAC's decision reflects a broader trend of tightening supply in the global soda ash market. Factors contributing to this include increased demand and possibly reduced production capacities or supply chain disruptions.
Historically, the US natural soda ash prices have been under pressure due to several factors such as China's synthetic capacity that led to increasing global supply, lower consumption in Europe leading to excessive supply, and material flow from Europe to Asia.
European producers have redirected their supply to Asia, further intensifying competition and suppressing prices.
Shares of Tata Chemicals were trading 2.35% higher at ₹1,111.85 apiece on the BSE around 10.03 am.
Also Read: HUDCO shares jump 17% in two sessions; What's the key trigger? Explained
(Edited by : SonalMohan Jadhav)
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