India PE, PP import interest weak on volatile currency, slow customs

14 September 2011 10:31  [Source: ICIS news]

SINGAPORE (ICIS)--India’s import interest for polyethylene (PE) and polypropylene (PP) continues to be weak because of the depreciated Indian rupee and persistently slow customs clearance at its local main port, industry sources said on Wednesday.

The rupee has depreciated by about 9% against the US dollar since the middle of July, local players said.

As a result, imported goods are no longer as competitively priced compared to domestic material, the players added.

The buying interest for September cargoes in India has been low since the beginning of September as importers are refraining from purchasing PE and PP because of ample domestic supply and amid the congestions at the country’s ports.

Stricter checks are being made on LLDPE containers at India’s main port of Nhava Sheva, following the discovery of some local importers who have been misdeclaring metallocene LLDPE (MLLDPE) cargoes as butane-based LLDPE, to take advantage of lower tax charges, traders said.

“Every single container of LLDPE is being checked. This is lengthening the process of customs clearance,” a Mumbai-based trader said.

“Usually it takes one to five days to clear a container of plastics resin. However, now it is taking at least 10 days,” a Mumbai-based converter said.

Local players said the market outlook is poor as a result, especially because of weaker demand in the local downstream demand in the run-up to the Hindu festival of Diwali at the end of October.

The offers of Middle East LLDPE film on 14 September were at $1,360-1,370/tonne (€993-1,000/tonne) CFR (cost & freight) Mumbai, while the offers of Middle East high density PE (HDPE) film were at $1,370-1,380/tonne CFR Mumbai.

Iranian offers of PP raffia were at $1,550/tonne CFR Mumbai.

“Demand is not improving [as we had hoped]. Although interest for imports is not strong, we do not [foresee] a significant increase in domestic sales,” a local polyolefins producer said.

 ($1 = €0.73)

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By: Ong Sheau Ling
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