India's RIL targets higher PE prices on short supply, better demand

23 August 2012 12:25  [Source: ICIS news]

SINGAPORE (ICIS)--India's Reliance Industries Ltd (RIL) raised the list prices for some linear low density polyethylene (LLDPE) and low density PE (LDPE) grades by Indian rupees (Rs) 1.00/kg, buoyed by the recent tightening of supplies and strengthening in downstream demand, a source close to the company said on Thursday.

RIL announced late on 22 August the increase in list prices for LLDPE injection and all LDPE grades except lamination by Rs1.00/kg, with effect from 23 August, the source said.

The new list prices of LDPE film now stands at Rs95.00-95.50/kg DEL (delivered), inclusive of a 12.3% excise duty, the source added.

“There has been a drop in import arrivals in recent months, particularly for general purpose LDPE film grades. Hence, prices are on the rise,” the source said.

“The higher metallocene LLDPE (MLLDPE) prices led to a switch in blending compositions to the cheaper LDPE film. As a result, demand for LDPE film boomed,” a major film converter based in Mumbai said.

Spot C6-MLLDPE prices were assessed at $1,480-1,500/tonne CFR (cost and freight) Mumbai on 22 August, according to ICIS.

Buying ideas for LDPE film were at $1,330-1,350/tonne CFR Mumbai on 23 August, industry sources said.

Domestic sales of LDPE film have consequently improved tremulously, a source from RIL, the sole local producer, said.

“Over April to July, the overall demand in India has jumped 35% for LDPE in general,” the source said.

Besides the decline in LDPE imports, imports of LLDPE injections were very low, market players said.

Exxonmobil and SABIC are the only two foreign suppliers to India for LLDPE injection grades.

Lower production output of LLDPE injection was one of the reasons for the lower export volumes to India, Indian traders said.

LDPE film is commonly used in food and medical/pharmaceutical packaging, as well as in agricultural film and disposable nappies.

Applications of LLDPE injection include house wares, rubbish bins, lids and large industrial containers and lids.

($1 = Rs55.50)

By: Ong Sheau Ling
+65 6780 4359

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