Chemical Stocks Jump Up To 19% After Govt. Likely to Impose Anti-Dumping Duty on Chinese DASDA

SYNOPSIS: India proposes an anti-dumping duty on a key chemical from China after a probe finds unfair pricing hurting domestic players, with the final decision pending, boosting sentiment in local chemical stocks.

On Thursday, India’s trade authorities proposed the imposition of anti-dumping duties on imports of a key industrial chemical from China, following an investigation that found such imports were adversely impacting domestic manufacturers.

The Directorate General of Trade Remedies (DGTR), operating under the Ministry of Commerce, has recommended a duty of $3,453 per metric tonne on imports of 4,4-Diamino Stilbene-2,2-Disulphonic Acid (DASDA). This organic chemical is widely used in the production of optical brightening agents and dye intermediates, particularly for the textile industry.

The investigation was initiated after a complaint filed by Deepak Nitrite Limited, which raised concerns over the influx of low-priced imports. The DGTR has suggested a reference price mechanism, wherein importers would be required to pay the difference between the ​arrival ​price and a reference price if the shipment price falls below the benchmark level of $3,453 per tonne.

The probe found preliminary evidence indicating that the product was being exported to India at unfairly low prices, causing material injury to local producers. The investigation covered the period from April 2023 to June 2024, along with an assessment of prior trends to evaluate the broader impact on the domestic industry.

It is noteworthy that India had previously imposed anti-dumping duties on DASDA imports, which were discontinued in 2019. The final decision on implementing the proposed duty will be taken by the Ministry of Finance.

The Directorate General of ​Trade Remedies (DGTR), under the trade ministry, ​launched the probe into imports of DASDA following a complaint by Indian ​chemical maker Deepak Nitrite Limited. The development has improved sentiment in the domestic chemical sector, leading to a sharp uptick in the following chemical stocks:

Deepak Nitrite Limited

With a market cap of Rs. 18,851 crores, the stock moved up by around 4 percent on BSE, to hit an intraday high at Rs. 1,432.75 during Friday’s trading session, against its previous closing price of Rs. 1,383.05.

Deepak Nitrite Limited, a prominent chemical manufacturing public limited company, is engaged in the business of manufacturing Advanced Intermediates. It has a wide range of product portfolio including Nitrites, Nitro Toluidines, Fuel Additives, Xylidines, Oximes, Cumidines, Speciality Agrochemicals, Optical Brightening Agent (OBA), DASDA, and Benzotrifluoride.

Meghmani Organics Limited

With a market cap of Rs. 1,083 crores, the stock moved up by more than 4 percent on BSE, to hit an intraday high at Rs. 44.4 during Friday’s trading session, against its previous closing price of Rs. 42.49.

Meghmani Organics Limited, a fully integrated diversified chemical company, is engaged in the business of manufacturing and selling pigments, agrochemicals and crop nutrition products. The company is amongst the top three global Phthalocyanine-based pigment players, holding an 8 percent market share and amongst the top-10 manufacturers of pesticides in India, with a presence across the entire value chain.

Sudarshan Chemical Industries Limited

With a market cap of Rs. 6,367 crores, the stock moved up by around 8 percent on BSE, to hit an intraday high at Rs. 831 during Friday’s trading session, against its previous closing price of Rs. 770.85.

Sudarshan Chemical Industries Limited is engaged in the business of manufacturing and selling a wide range of organic, inorganic, and effect pigments, along with manufacturing and selling pollution control equipment, size reduction equipment and grinding equipment for industrial applications.

Bodal Chemicals Limited

With a market cap of Rs. 685 crores, the stock moved up by around 19 percent on BSE, to hit an intraday high at Rs. 57.99 during Friday’s trading session, against its previous closing price of Rs. 48.74.

Bodal Chemicals Limited is engaged in the business of manufacturing dyes, dye intermediates and basic chemicals. It is the world’s largest manufacturer and exporter of Dyes Intermediate, Dyestuff and Sulphuric Acid, with vertically and horizontally integrated operations.

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