India producers raise PE, PP prices on good demand, tight supply

02 February 2010 13:20  [Source: ICIS news]

SINGAPORE (ICIS news)--Indian producers have raised their domestic prices of polyethylene (PE) and polypropylene (PP) to keep pace with the surge in import offers that have resulted from moderately good demand and restricted supply, industry sources said on Tuesday.

Producers raised their PE and homopolymer PP prices by Indian rupees (Rs) 1/kg ($0.02) to Rs79-88/kg EXW (ex-works) and Rs77-80/kg EXW respectively, according to sources.

The price increases for February cargoes followed three price hikes in January.

Prices of PE imports into India as of 29 January were at $1,380-1,600/tonne (€994-1,152/tonne) CFR (cost and freight), up by $10-50/tonne from a week earlier, according to global chemical market intelligence service ICIS pricing.

Prices of imported PP were $20-60/tonne higher at $1,340-1,380/tonne CFR India.

The growing appetite for imports was due to tight domestic supply caused by prolonged turnarounds at Haldia Petrochemicals’ PE and PP plants.

The company was in the process of restarting the plants, which were shut down for maintenance work at the end of October last year, a source close to the company said.

Week-long outages last week at Reliance Industries’ PE plants at Gujarat were also affecting tightness, sources said.

The better-than-expected demand and snug supply due to production issues belied earlier expectations that the rally of PE and PP prices would reverse in February.

Most market players said they were surprised by the level of demand and tight supply.

“We didn't expect demand for raffia to be so good,” said an India-based PP converter.

($1 = Rs48.18/$1 = €0.72)

For more on polyethylene and polypropylene, visit ICIS chemical intelligence
Read John Richardson and Malini Hariharan’s Asian Chemical Connections blog
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By: Prema Viswanathan
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