12 August 2011 06:45 [Source: ICIS news]
SINGAPORE (ICIS)--India’s polyethylene (PE) and polypropylene (PP) prices have stopped increasing this week, with large volumes of lower-priced imports purchased in July due to arrive in the country in the next three weeks, industry sources said on Friday.
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Most local market players have retreated to the sidelines as a result of the incoming large supply and the uncertain market outlook.
Most offers for imports have been withdrawn and buying ideas were lower this week, causing a standstill in the domestic market, market players said.
“Trading activity has [seemed to] diminish this week and converters are [expecting] a price fall, which is a contrast to the bullish sentiment last week,” a Mumbai-based trader said.
Polyolefin prices in
The Indian import prices of linear low density PE (LLDPE) film, high density PE (HDPE) film, low density PE (LDPE) film and PP raffia have increased by $95-185/tonne (€67-130/tonne) or 6.3-14.9% from early July to 5 August, according to data from ICIS.
On 12 August, only offers for LLDPE film were heard by two producers from the
There were no new offers heard for HDPE film and LDPE film on 12 August, while buying ideas were at $1,400/tonne CFR Mumbai and in the high $1,500s/tonne CFR Mumbai respectively, the sources added.
Buying and selling ideas of PP raffia on 12 August were at $1,600-1,650/tonne CFR Mumbai, local traders said.
Local players are expecting a large volume of cargoes that were purchased in July, particularly those of HDPE film, to arrive in
The large purchases were done when the domestic spot prices of HDPE film bottomed out at an average price of $1,255/tonne CFR Mumbai at the end of June, after they started declining from the middle of April.
On 12 August, the prices of HDPE film were at Indian rupees (Rs) 83.50/kg (Rs83,500/tonne, $1,844/tonne) DEL (delivered) Mumbai and those of LLDPE film were at Rs84.50/kg DEL Mumbai, sources said.
“Perhaps this may be a temporary phenomenon as Indian Oil has started to resume its LLDPE film production, which will ease the tight supply,” a second Mumbai-based trader said.
Indian Oil has ramped up its 650,000 tonne/year HDPE/LLDPE swing plant this week to above 70% capacity after the producer managed to secure cyclohexane solvent.
In addition, Haldia Petrochemical is on track to restart its 700,000 tonne/year HDPE/LLDPE swing plant this weekend, which will relief the short local supply.
“We are expecting the local supply to normalise for HDPE and LLDPE film by the end of August and with the large volumes of imports arriving soon, prices are unlikely to hike further unless local demand improves further,” a Mumbai-based converter said.
Local producers are expecting prices to stay stable-to-firm for the rest of August, depending on the consideration of the status of the global economy and the local supply-demand situation.
“Although there are uncertainties in the market, we do not expect the market to slump if [the price of] crude stays above $80/bbl,” a local producer said.
($1 = €0.70, $1 = Rs45.29)
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