03 March 2009 10:29 [Source: ICIS news]
SINGAPORE (ICIS news)--Indian polyolefins producers have slashed domestic polypropylene (PP) prices by up to 8% due to increased competition from imports, sources close to the companies said on Tuesday.
"The gap between prices of imported and locally produced PP had widened to around $200/tonne [€158/tonne], prompting several buyers to import lower-priced material," said one of the sources.
After the recent reduction, the gap had narrowed significantly, he said.
"However, import offers are still around $950/tonne CFR [cost and freight] India, whereas domestic PP is priced at $1,050/tonne ex-works on an import-parity basis," he added.
Indian producers reduced PP prices by Indian rupees (Rs) 5/kg ($96/tonne) on an ex-works basis for film grade and by Rs3/kg for raffia and injection grades this week, to Rs55/kg.
"The reason prices of film grade have been slashed more than those of other grades is that most of the imported material is film grade," said a second source.
A PP buyer said that this week’s price reduction was aimed at wooing customers ahead of the expected start-up of Reliance Industries’ 900,000 tonne/year PP plant at Jamnagar by end-March, which is expected to ease the current tight supply in the market.
"Currently, domestic supply of PP is so restricted that we have been waiting for weeks for material to be delivered, even after finalising the purchase documents," he said.
In February, local producers had hiked prices by up to 6% on the back of tight supply and strong demand, causing considerable distress to buyers.
($1 = Rs52.03, $1 = €0.79)
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