India’s Reliance hikes PE list prices on weak currency, flat demand

03 October 2011 10:08  [Source: ICIS news]

SINGAPORE (ICIS)--Indian major Reliance Industries Limited (RIL) has raised its list prices for all of its polyethylene (PE) grades with effect from 1 October this year, in line with the weak Indian rupee and flat domestic demand, a source close to the company said Monday.

RIL announced late on 30 September an increase of Indian rupees (Rs) 1.50/kg (Rs1,500/tonne, $31/tonne) for low density PE (LDPE) film, Rs1/kg for linear low density PE (LLDPE) film and Rs1.50/kg for high density PE (HDPE) film.

Despite the softer prices in the China market, RIL raised its prices after its last decrease on 18 August.

The prices of LDPE film are at Rs90.00-90.50/kg DEL (delivered), while the prices of LLDPE film and HDPE film are at Rs78.00-79.00/kg DEL and Rs79.50-80.00/kg DEL respectively, inclusive of a 10.3% excise duty.

Local players said they expected the price adjustment as the prices of local products should be increased to match those of imported material.

“We have noticed the local demand has been steady in September and is likely to sustain in October,” a source close to the company said.

“With the weaker rupee, we have decided to raise the prices to match the current import levels,” the source added.  

The equivalent import parities are quoted by RIL at $1,550/tonne (€1,163/tonne) CFR (cost & freight) Mumbai for LDPE film, $1,320/tonne CFR Mumbai for LLDPE film and $1,380/tonne CFR Mumbai for HDPE film on 3 October, local traders said.

The offers of imported spot cargoes were heard at $1,470-1,530/tonne CFR Mumbai for LDPE film, $1,340-1,350/tonne CFR Mumbai for LLDPE film and $1,350-1,370/tonne CFR Mumbai for HDPE film on 3 October, the traders added.

“Imports have been unattractive for the past few weeks as local material is cheaper because of the currency advantage. It has been difficult for us to import,” a Mumbai-based trader said.

“The domestic and imported material are priced more on par now, so the sales of imports should be better. However, the soft Chinese prices has somehow affected the local sentiment,” a second Mumbai-based trader said.

($1 = Rs49.00, $1 = €0.75)

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By: Ong Sheau Ling
+65 6780 4359

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