India April-November PE imports rise 10-12%, PP imports fall

03 December 2010 06:57  [Source: ICIS news]

By Prema Viswanathan

SINGAPORE (ICIS)--India posted a 10-12% year-on-year increase in polyethylene (PE) imports in the first eight months of its fiscal year, while it took in 15-17% less of polypropylene (PP) over the same period, industry sources estimated on Friday.

PE imports totalled 600,000 tonnes for the April-to-November period, while PP imports were pegged at 225,000 tonnes, they said.

“The volumes of PE and PP imported in the past eight months are much higher than we expected,” said a source close to an Indian polymer producer.

For the full financial year ending 31 March 2011, Indian producers were expecting PE imports to post a growth of less than 10% but a 20% decline in PP purchases from abroad, industry sources said.

“This is because local supply [of PP and PE] is expected to become much more abundant in the next four months,” said the source close to an Indian polymer maker.

Strong demand for PE drove up the import volumes, especially in PE pipes and flexible packaging segments, an end-user said.

“The use of PE pipe grade in the wire and cable segment, especially, has seen a steep rise this year,” he said.

Imports of metallocene PE, which is increasingly being used in edible oils packaging, has also been showing strong growth, said a source to another Indian polymer producer.

“Consumption of this grade is estimated to be increasing by 25% to well over 100,000 tonnes in the current financial year,” he said.

High density PE (HDPE) and linear low density PE (LLDPE) drive the surge in PE imports, but low density PE (LDPE), used mainly in packaging, shrank by 10-12% due to global shortages, he added

Meanwhile, PP imports had been falling as local supply increased, with the start-up of a 600,000 tonne/year PP plant of Indian Oil Corp (IOC) at Panipat in Haryana state, sources said. The company has also started a 650,000 tonne/year PE plant at the same site.

But the estimated total imports of PP for the April-to-November period at 225,000 tonnes was much higher than the projected 150,000 tonnes, given strong demand for non-wovens and copolymer PP, said a Mumbai-based trader.

“Non-wovens have become very popular, thanks to the growing popularity of ecologically sustainable materials to replace shopping bags, while copolymer PP demand is driven by the surge in automotive production,” he said.

Demand for copolymer PP for the year ending March 2011 was estimated to hit close to 300,000 tonnes/year, up 20% from last year, the trader added.

“We are very surprised that imports during April-November were actually 50% higher than our initial estimates,” said the source close to the first Indian producer. “Obviously we underestimated the bullishness of Indian PP demand,” he said.

Significant volumes of PP continued to be shipped into India despite the government's recommendation to slap final antidumping duties on imports from Saudi Arabia, Oman and Singapore in August.

“We did expect imports to slow after this announcement, as these countries are significant exporters to India,” said a second trader.

“But obviously, supply constraints in the local market and diversion of Indian cargoes to markets such as China, where netbacks were higher than in India, forced buyers to resort to imports,” he added.

Domestic supply of the polymers was squeezed by a spate of scheduled and unscheduled turnarounds at PE and PP plants. 

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By: Prema Viswanathan
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