Shares of speciality chemical leaders SRF and Navin Fluorine surged nearly 12% on January 9, following reports of a significant price increase in refrigerant gases in the US market. This development has extended their upward trajectory to the third consecutive trading day.
According to a report, US distributors of refrigerant gases, including IGas USA, have announced price hikes of up to 200% for R32 and R125 due to supply disruptions.
A $1/kg increase in R32 gas prices could potentially boost SRF's EBITDA by ₹260 crore and Navin Fluorine's by ₹77 crore.
Key Insights:
- SRF has an annual R32 production capacity of 29,000–30,000 tonnes and an R125 capacity of nearly 7,000 tonnes.
- With a current R32 capacity of 4,500 tonnes, Navin Fluorine is set to double its production next month with an additional 4,500 tonnes.
The refrigerant gas market has faced headwinds in the past two years due to weak global demand and competition from Chinese inventories. The recent price hike offers a potential boost to earnings, driving investor optimism.
Navin Fluorine's stock was trading at ₹3,887.90 on the NSE, just below its 52-week high of ₹4,017.10, which it had touched earlier in the session. At the same time, SRF shares were priced at ₹2,636.95. (as on January 92025, 9:46 AM)
Easy & quick
Leave A Comment?