New ban on plastic bags in New Delhi to hit India PE demand

12 September 2012 12:19  [Source: ICIS news]

SINGAPORE (ICIS)--Demand for polyethylene (PE) resins in New Delhi may be dampened by a ban on plastics bags announced in the Indian capital on 11 September, industry players said on Wednesday.

The Delhi government has imposed a blanket ban on the manufacture, storage and usage of plastic bags in the capital, regardless of thickness.

A prohibition on usage of plastic bags that are not 40 microns thick applies to most of India, prior to New Delhi government’s announcement on Tuesday.

Delhi region chief minister Sheila Dikshit was quoted in the Financial Times as saying that bags for biomedical waste and woven bags will be exempted from the ban.

It was not immediately clear whether the directive – to be enforced under environmental laws with punishment of up to five years in prison – would apply to black rubbish bags.

The new ban will curtail demand for PE film and coating grades, which are the raw materials in the production of plastic bags.

“This ban will for sure hit the plastic converting industry here,” a New Delhi-based trader said.

Apart from those based in New Delhi, converters in Damman will also affected by the ban on plastics in the Indian capital, market players said.

“We do sell our finished plastic bags to Delhi. Now, we have one less outlet,” a Damman-based converter said.

“With this new ban, we can’t be sure whether there will be a decent growth this year,” an India PE producer said.

In the fiscal year ending March 2012, India’s consumption of PE resins was close to 3m tonnes, up 5-6% year on year, according to market estimates.

By: Ong Sheau Ling
+65 6780 4359

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