India producers hike PE, PP prices by $43/tonne amid tight supply

12 August 2010 12:51  [Source: ICIS news]

SINGAPORE (ICIS)--Indian producers have increased domestic prices of polyethylene (PE) and polypropylene (PP) by Indian rupees (Rs) 2/kg (Rs2,000/tonne, or $43/tonne) for the second time in two weeks as a result of tight supply and low stocks among customers, industry sources said on Thursday.

“Supply has been extremely short and our inventories are very low, so we have no option but to accept the price increases,” said a Mumbai-based PP converter.

A spike in buying activity over the past two weeks has constrained supply, as buyers rushed to replenish their stocks in anticipation of a further hike in prices.

Adding to the tightness is the delay in the arrival of import cargoes resulting from the closure of Mumbai’s ports following a ship collision on 7 August.

Domestic prices of high density PE (HDPE) film and linear low density PE (LLDPE) were increased (in dollar terms) to $1,330-1,340/tonne DEL (delivered), while raffia- and injection-grade PP prices were increased to the equivalent of $1,300/tonne DEL.

Copolymer PP was extremely scarce and traders said some buyers were even accepting premiums of above Rs5/kg over raffia-grade PP.

Major PE and PP producers in India include Reliance Industries, Haldia Petrochemicals and Gail India.

($1 = Rs46.89)

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By: Prema Viswanathan
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