India’s Reliance hikes prices of some LDPE grades on tight supply

13 September 2012 09:58  [Source: ICIS news]

SINGAPORE (ICIS)--Indian major, Reliance Industries Ltd (RIL) has raised the list prices of some of its low density polyethylene (LDPE) product grades by Indian rupee (Rs) 1.00/kg (Rs1,000/tonne/$18/tonne), because of supply shortage, industry sources said on Thursday.

Its general purpose and heavy duty LDPE films are now priced Rs97.00-97.50/kg DEL (delivered) India, inclusive of a 12.3% excise duty, as of 13 September.

This is the second time that Reliance raised prices this month.

LDPE supply is short in India on low volumes of import arrivals amid healthy sales of locally produced polymers, importers said.

In certain applications, the attractively priced LDPE film is used in place of metallocene linear low density PE (LLDPE) film, creating an opportunistic demand for LDPE film, they added.

Also, higher import offers quoted by Middle East producers early in the week at $1,370-1,400/tonne (€1,069-1,092/tonne) CFR (cost and freight) Mumbai for October shipments boosted Reliance’s confidence to hike list prices, they added.

“Feedstock (naphtha and ethylene) costs are still high. This cost needs to be passed down to the PE buyers,” a source close to RIL said.

“LDPE film used to command a price premium over LLDPE film, but over the past five months, prices of LDPE film are much lower,” a New Delhi-based trader said.

LDPE prices must increase given the product’s higher production cost compared with LLDPE films, the trader said.

On 13 September, prices of LLDPE film imports were discussed at $1,370-1,400/tonne CFR Mumbai, while C6 MLLDPE were at $1,500-1,540/tonne CFR Mumbai, market players said.

($1 = €0.78 / $1 = Rs55.22)

By: Ong Sheau Ling
+65 6780 4359

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