17 September 2012 06:10 [Source: ICIS news]
By Prema Viswanathan
SINGAPORE (ICIS)--Demand for high density polyethylene (HDPE) pipe grade in India is expected to pick up in October on the back of about a month-long pre-festival season buying spree, suppliers and buyers said on Monday.
“Demand has been very poor this year even during the peak pre-monsoon season from April to June,” said a source close to an Indian supplier.
The main cause of the bearish market sentiment was political instability and an uncertain economic outlook, the source said.
Demand typically declines during the monsoon season which lasts from June until August as pipe-laying activity comes to a standstill.
“We generally see a good surge in demand from August onwards, but this year, buying interest has been very weak as government-funded infrastructure projects have not taken off,” said an Indian buyer.
The main consumers of pipe grade HDPE are the water supply, gas supply and irrigation segments.
Sales of black compounded grade HDPE 100 pipe have declined in the past few months as the depreciation of the Indian rupee versus the US dollar made imports unaffordable for most buyers.
The black compounded grade HDPE is used for high pressure applications and is not locally produced.
Prices of this grade have increased by $100/tonne (€76/tonne) or 3.5% since early August to $1,485/tonne CFR (cost and freight) ?xml:namespace>
Prices of natural grade HDPE 100 pipe, for which there is adequate local supply, have also risen in tandem to $1,465/tonne CFR India.
The main factor behind the increase in prices is the push from high feedstock costs for integrated producers.
Naptha prices rose by around $20/tonne week-on-week to $1,012-1,015/tonne CFR Japan on 13 September.
Exporters of black HDPE pipe in the Middle East and northeast Asia have found it extremely difficult to sell their cargoes into
“We have decided to target more lucrative markets such as
However, there are payment issues due to sanctions on
Middle East suppliers are also finding higher netbacks in their own region compared with
An Oman-based buyer said
Indian producers of pipe grade HDPE include Reliance Industries, Haldia Petrochemicals and Gail India, while
($1 = €0.76)
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