05 October 2012 04:34 [Source: ICIS news]
SINGAPORE (ICIS)--State-owned Indian Oil has introduced late on Thursday a price protection on polyethylene (PE) and polypropylene (PP) in the Indian domestic market, so as to attract more buyers, a company source said.
The price protection will either remain valid until 17 October or until the next price revision, depending on whichever is earlier, the source said.
Subsequently, a separate Indian producer, Reliance Industries Ltd (RIL), announced on 30 September a reduction of Rs1.00-3.00/kg across all grades of PE and PP, with effect from 1 October because of the recent strong appreciation of the Indian rupee, local traders said.
“The price reduction by RIL in the early week did weigh on buying sentiment further, so in order to increase sales, we have to introduce price protection to bring back our customers’ confidence,” a source of Indian Oil said.
“Rupee has an appreciation of 7-8% in just less than a month, local makers have to reduce prices and introduce price protection to attract buyers,” a Mumbai-based trader said.
Prior to the list price cut and price protection, Indian Oil has reduced the operating rates at its polyolefins facilities in Panipat to below 100%, to prevent further build-up in its inventories from the poor sales domestically.
Indian Oil owns a 350,000 tonne/year HDPE/LLDPE swing plant, 300,000 tonne/year HDPE facility and 600,000 tonne/year PP units.
($1 = Rs51.75)
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