India trades of HDPE pipe to pick up after Rs3/kg price cut

05 October 2012 05:45  [Source: ICIS news]

SINGAPORE (ICIS)--Buying interest for locally produced natural high density polyethylene (HDPE) pipe grade in India is expected to pick up following a sharp reduction in domestic prices this week, suppliers and buyers said on Friday.

Indian producers reduced prices of natural grade HDPE by Indian rupees (Rs) 3.00/kg ($58.97/tonne) on 1 October, to Rs92.00-92.50/kg DEL (delivered) for HDPE 100 and to Rs86.00-88.50/kg DEL for HDPE 80, excluding a 12.3% excise duty, market players said.

The reduction this week reverses the Rs2/kg price hike announced by the producers on 1 September.

“Buyers strongly resisted the price hikes last month as demand in the PE pipe segment has been very weak,” said a Mumbai-based trader.

Bearish market sentiment stems from political instability and an uncertain economic outlook in India, causing government-led projects in the key infrastructure segment to be delayed, a supplier said.

The steady appreciation in the value of the Indian rupee versus the US dollar also pushed buyers to seek a price reduction, said a second trader.

The rupee has gained 7% versus the dollar in a month to Rs51.75 on 5 October.

Demand for HDPE is expected to pick up by the end of October on the back of a month-long pre-festival season buying spree, suppliers and buyers said.

Indian producers of natural pipe grade HDPE include Reliance Industries, Haldia Petrochemicals and Gail India.

($1 = Rs51.75)

By: Prema Viswanathan
+65 6780 4359

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