06 May 2009 05:48 [Source: ICIS news]
By Prema Viswanathan
SINGAPORE (ICIS news)--Indian polyolefins markets are likely to slow down in June, despite producers’ upbeat demand projections, traders and end users said on Wednesday.
“PE is now selling at a premium of rupees (Rs) 2-5/kg ($0.04-0.10/kg) in the domestic market, but PP is now being offered at a discount of Rs3/kg,” said an Indian trader.
This is in tandem with the trend in the import market, where a major global supplier reduced its offers for PP raffia grade by $20/tonne from last week to $1,130/tonne CFR (cost and freight) ?xml:namespace>
Prices of imported PE and PP had surged by up to $140/tonne in the past month to $1,130-1,230/tonne CFR India and $1,110-1,200/tonne CFR India respectively, according to global chemical market intelligence service, ICIS pricing.
The main reason for the increasing customer resistance in the PP market was the pressure on end users’ margins and the prospect of increased availability in the coming weeks. A new
However, sources close to the Indian producers were quite optimistic that demand growth would be strong enough to absorb the additional capacity.
“All the downstream sectors for PP are showing strong growth, especially packaging and automobiles,” said one of the sources.
Packaging has also been the main driver of PE demand.
The prospect of tightening supply, with Haldia Petrochemicals running its polymer plants at reduced rates and even mulling a shutdown this month, was likely to offer support to Indian PE prices, a second trader said. “There is no additional PE capacity due on stream in
Although US and European cargoes were on offer, Indian customers were wary of purchasing significant volumes from these destinations, due to delays in delivery caused by shipping bottlenecks.
Indian producers raised domestic prices by Rs2/kg for PE to Rs70-74/kg delivered (DEL) excluding taxes and by Rs1.50/kg for PP to Rs66.50-70.50/kg DEL in early May, citing tight supply, a surge in import prices and strong demand.
($1 = Rs49.39)
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