02 December 2008 09:11 [Source: ICIS news]
SINGAPORE (ICIS news)--Polymer trading activity is limping back to normal in Mumbai six days after the devastating terrorist attacks in the country's commercial capital, but longer-term concerns continue to haunt the petrochemical industry, market players said on Tuesday.
"It's business as usual today. Reliance Industries' office at Nariman Point in south Mumbai, located close to the site of the attacks, has been seeing good attendance since yesterday," a source close to the petrochemical company said.
Mumbai's polymer trading community also reported robust activity on improved demand.
Buying sentiment was upbeat due to low inventories among converters, but the longer-term market outlook was uncertain due to the unfolding global economic downturn, said suppliers and buyers.
"Prices are being hiked on the back of a resurgence in buying activity. But it is hard to say how long the bullishness will last," said a polymer supplier.
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Trade, however, is not expected to be affected in the near term, they said.
P Chidambaram will be leaving the finance ministry to become the new home minister, putting Prime Minister Manmohan Singh in charge of finance, a move that finds favour with producers and converters.
"I think Manmohan Singh will do a good job with the finance portfolio, which he has held in the past, being a reputed economist," said a polymer converter.
"I am expecting excise duties on polymers to come down from 14% to 10-12% in the coming days, providing considerable relief to suppliers and buyers."
However, an export-oriented processor who buys large volumes of imported polypropylene (PP), said it was worried that import duties may be raised from 5% to 7% in a bid to boost economic activity.
"This will make raw material purchases more expensive for us," it said.
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