India’s BOPP film demand likely to grow at 14-15% from 2012-2013

12 December 2012 04:42  [Source: ICIS news]

MUMBAI (ICIS)--India’s biaxially oriented polypropylene (BOPP) film consumption will likely grow at 14-15% from April 2012 to March 2013, supported by robust demand from the food and flexible packaging sectors, industry sources said on Wednesday.

The double-digit growth rate is expected despite the current high inventory levels of BOPP film goods, the sources added.

Industry sources attributed the rising demand from the food and flexible packaging sectors to the country’s urbanisation and greater retail power from the consumers.

“Demand [for BOPP film] is in fact healthy, but the [BOPP film] products’ stock levels are really high [and] that is supressing the prices,” a New Delhi-based BOPP film processor said.

“Customers are actually not asking for lower prices [of BOPP film goods], but the supply overhang seen is the key bearish factor weighing on prices,” the processor added.

Market players have estimated that India will take around two years to reduce the oversupply of BOPP film.

The long supply is a consequence of overestimated growth rates in the downstream sector, where its appetite has not increase in tandem with the expansion seen in BOPP film production, they added.

“The global economic slowdown is one major factor [for the slower growth rate],” the same processor said.

Softer prices of BOPP film are one of key reasons keeping buying ideas for raw material BOPP film resins at low levels, the market players said.

“I am not willing to pay anything higher than $1,400/tonne [CFR (cost and freight) Mumbai] for any new [BOPP film resins] imports or above Indian rupee (Rs) 94.00/kg ($1.73/kg) DEL (delivered) west India,” a Mumbai-based BOPP film manufacturer said.

Selling ideas of BOPP film resins from Middle Eastern producers were at mid-$1,400s/tonne CFR Mumbai on 12 December, industry sources said.

List prices of Indian makers for BOPP film resins are at Rs98.50-100.00/kg DEL India, inclusive of a 12.3% excise duty, effective from 1 December onwards.

($1 = Rs54.28)

Author: Ong Sheau Ling

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