11 August 2010 07:12 [Source: ICIS news]
By Prema Viswanathan
SINGAPORE (ICIS)--India’s polyolefins markets have rebounded strongly, with prices surging by nearly $120/tonne (€91/tonne) week on week, propelled by tight supply, rising feedstock naphtha and olefins costs and a price hike in the key China market, industry sources said on Wednesday.
The trend is likely to continue, with the start of the peak pre-festival demand season in September, they added.
High density polyethylene (HDPE) rose $120/tonne to $1,180-1,220/tonne CFR India during the same period. (please see charts below for more details)
“Imports of PP and PE into
Availability was extremely scarce early this week, with several key suppliers having already sold out their August allocations, sources said.
The supply constraints have been exacerbated with a recent outage at Reliance Industries’ Nagothane cracker complex, end users said.
“Our inventories are very low and we are scrambling for cargoes, but import offers are few and local supply is tight,” said a PP converter.
Imports of PP have dwindled due to limited supply from key exporting regions such as the
The anti-dumping duties imposed by the Indian government had led to fears that Saudi exporters may be hit by additional duties, which had further reduced PP imports, they added.
“Options for selling to Indian domestic converters are narrowing as no buyer or seller wants to take a risk with the bogey of duties hanging over their heads,” said a source close to a Saudi exporter.The ongoing probe into PP imports from
The imposition of fresh sanctions against
“Iranian exports to India have declined somewhat in the past few weeks as suppliers and buyers grapple with the issue of banking restrictions imposed on Iranian products and consequent delays due to diversion of cargoes through Dubai port,” said a source close to an Iranian supplier.
Iranian PE and PP were therefore priced around $30-40/tonne lower than product from other destinations, he added.
Persistently high crude values at above $80/bbl and the hike in domestic polymer prices by Indian rupees (Rs) 2-3/kg (Rs2000-3000/tonne) ($43-65/tonne) last week had also boosted sentiment in the Indian market.
“There is a feeling now that prices will continue to rise in the next few weeks, so processors who had maintained low inventories in the past few months due to the high price environment are now desperate to stock up,” said a trader.
Even the ongoing monsoon season failed to dampen buying sentiment, especially for PP and low density PE (LDPE) which faced the most intense supply constraints.
“Our export orders for finished goods have begun to pick up again, but we are not in a position to meet our commitments due to restricted raw material supply,” said a PP converter.
Demand from the flexible and rigid packaging segments has been quite good lately, said an LDPE processor.
“We expect demand to continue growing in the high double digits in the next few months, especially for multi-layer film used in milk pouches and edible oils packaging,” he said.
($1 = €0.74, $1= Rs46.33)
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