India’s Reliance hikes PE, PP prices on tight supply, high costs

01 March 2012 11:38  [Source: ICIS news]

SINGAPORE (ICIS)--India’s Reliance Industries Ltd (RIL) has raised its list prices for all grades of polyethylene (PE) and polypropylene (PP) by rupees (Rs) 1.00-3.00/kg (Rs1,000-3,000/tonne, $20-61/tonne), on persistently short supply and high raw materials costs, a source close to the company said on Thursday.

RIL raised linear low density (LLDPE) film list prices by Rs3.00/kg late on 29 February, while high density PE (HDPE) and PP grades were increased by Rs2.00/kg. LDPE film list prices were up by Rs1.00/kg.

The new PE list prices now stand at Rs92.50-93.00/kg DEL (delivered) India for LDPE film, Rs89.50-90.00/kg DEL India for LLDPE film and Rs86.50-87.50/kg DEL India for HDPE film, including a 10.3% excise duty, effective from Thursday, the source said.

The revised PP list prices are at Rs91.00-93.00/kg DEL India for raffia and Rs97.00-98.00/kg DEL for block copolymer, the source added.

The tight domestic market is a result of the forthcoming shutdowns at the HDPE facilities of Indian Oil and Gail India, the source said.

Imports, originating from the Middle East, which were booked in January and February, were under usual volumes, curtailing the already short Indian local supply, the source added.

Soaring high naphtha prices at close to $1,100/tonne CFR (cost and freight) Japan pressured the Indian major to raise its list prices, he said.

Propane prices are very high now, we have no choice but to raise our prices to maintain decent margins,” he added.

The increase in list prices by RIL is the second adjustment since February for LDPE, HDPE and PP, while LLDPE film is the third adjustment (please see graph below), he said.

Reliance PE, PP

“There may be another upward adjustment in the [PE] list prices in the middle of March because the market is still looking tight. We will adjust our list prices according to the market price,” the source said.

Spot prices in the domestic open market this week were discussed Rs1.00-2.00/kg higher at Rs89.00-90.00/kg DEL west India for LLDPE film, Rs88.50-89.00/kg DEL west India for HDPE film, Rs89.00-89.50/kg DEL west India for LDPE film and Rs92.00-93.00/kg for PP raffia, local traders said.

($1 = Rs49.10)

By: Ong Sheau Ling
+65 6780 4359

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