26 January 2012 08:24 [Source: ICIS news]
SINGAPORE (ICIS)--India’s February offers of linear low density polyethylene (LLDPE) film in the import market are up by 7% on average from January settlements because of the appreciated rupee and short supply, industry players said on Thursday.
Market supply tightened as a result of low operating rates and shutdowns at some facilities in the country and in the Middle East, the players added.
The offers for February were heard at $70-100/tonne (€54-76/tonne) higher than January settlements at $1,210-1,240/tonne CFR (cost & freight) Mumbai that were concluded close to a month ago, the players said.
On 24 January, a Saudi major offered LLDPE cargoes at $1,340/tonne CFR Mumbai, up by $100/tonne, while a separate Saudi producer offered at $1,280/tonne CFR Mumbai, up by $60-70/tonne, traders said.
A southeast Asian producer has been increasing offers by about $20-30/tonne weekly since the beginning of January to $1,330/tonne CFR Mumbai on 24 January.
The higher import offers are within the expectations of Indian traders and converters, and are likely to translate into deals on improved import sentiment, industry sources said.
“The rupee has been appreciating since 2012 began. This has lifted buy-sell ideas,” a Mumbai-based trader said.
“The exchange rate used at the Indian customs will be revised lower for February. This news will encourage more acceptance of the higher prices,” a Dubai-based trader said.
The revised exchange rate used for January at Indian customs was at Rs53.80/kg ($1.10/tonne) to $1/kg, which is up by Rs1/kg from December 2011, local traders said.
Persistently short local supply, caused by ongoing turnarounds at Haldia Petrochemical Limited (HPL)’s high density polyethylene (HDPE)/LLDPE swing plant at Haldia and reduced operating rates at Indian Oil’s HDPE/LLDPE swing facility at Panipat, continues to fuel the LLDPE film prices in the open market, the traders added.
In addition, concerns over supply from Al-Jubail have strengthened the import market, Indian players said.
However, the orders of February parcels are likely to progress at a slow pace this week because of the upcoming PlastIndia event next week and players in China, which is the key market, will remain absent this week amid the Lunar New Year holiday.
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