19 August 2010 08:27 [Source: ICIS news]
By Prema Viswanathan
SINGAPORE (ICIS)--India’s imports of polypropylene (PP) in April-July shrunk by 37% year on year, a trend likely to continue in the months ahead, even though demand during the period grew by 13%, industry sources said on Thursday.
India's PP imports fell to 114,000 tonnes in April-July, down from 182,000 tonnes in the same period last year, while demand totalled 809,000 tonnes.
“The main deterrent against imports has been the imposition of provisional antidumping duties (ADDs) against suppliers from Saudi Arabia, Singapore and Oman in July 2009,” said a source close to one of the affected suppliers.
Imports could see a further decline if the Indian government imposes final ADDs on cargoes from these countries by 23 August, the deadline set by the government for the announcement of these duties, said another source.
The current supply constraints could intensify if the government imposes ADDs on PP imports from ?xml:namespace>
Sources close to Indian producers, however, said that the ADD was not the major factor behind the import decline.
“The main reason for falling imports is plentiful local supply and the benchmarking of local prices in parity with imports for the re-exporting segment,” said a source close to one of the local producers.
However, exporters to
“Availability of PP has been very limited in the past few months locally as well as globally, so those of us who were maintaining low inventories, waiting for prices to bottom, found ourselves scrambling for cargoes,” said a PP processor.
Prices had been falling since late May but bottomed in late July, surging by more than $100/tonne (€78/tonne) in the past two weeks to $1,270-1,330/tonne CFR (cost and freight) India for raffia and injection grades on 13 August, ICIS data showed.
Converters also disagreed with Indian producers’ contention that local offers were at parity with import prices for the re-export segment.
“Local prices have been at a premium of at least $50/tonne over import prices. But even so, availability is restricted,” said a converter who exports PP raffia bags to the
Indian producers hiked prices three times in as many weeks to Rupees (Rs) 76-80/kg ($1,636-1,722/tonne) EXW (ex-works) last week.
Although Reliance Industries brought on stream a 900,000 tonne/year PP plant last June at
The sharp increase in demand for PP, especially from the foodgrain packaging and automotive segments, has intensified the supply squeeze, said end-users.
“The raffia segment alone has seen an 18% increase in consumption, especially in the foodgrain packaging segment,” said another source close to a producer.
The state-owned Food Corporation of
The spectacular growth in
“Demand for copolymer PP is estimated at 250,000-300,000 tonnes/year currently, up 20% from last year,” he said.
($1 = €0.78/$1=Rs46.46)
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