04 January 2013 06:23 [Source: ICIS news]
SINGAPORE (ICIS)-Improving demand and a decline in imports has spurred buying in the Indian polyethylene (PE) market, with buyers offering little resistance to the hike in domestic polyethylene (PE) list prices announced on 1 January, suppliers and buyers said on Friday.
Indian producers hiked list prices of all high density PE (HDPE) and linear low density PE (LLDPE) grades and some and low density PE (LDPE) grades by Indian rupees (Rs)1/kg ($18/tonne) on Tuesday, the producers said.
Only heavy duty LDPE grades with low melt index and high melt index and injection moulding grade of LDPE were raised by Rs1.50/kg.
The hikes followed discounts introduced in mid-December 2012 to spur buying activity, which had turned sluggish towards the end of the year.
Earlier, Indian producers had raised domestic list prices on 1 December to counter the steady depreciation in the value of the Indian rupee.
“Indian producers are relieved that the Indian rupee is now relatively stable and buying activity has revived,” said a source close to one of the producers.
Another factor boosting buying sentiment is the decline in imports.
“Only 70,000 tonnes of HDPE and LLDPE arrived in November, compared with 98,000 tonnes and 95,000 tonnes in September and October respectively,” said the source
Imports dwindled because of weak demand and the high costs of imports because of the steady depreciation of the Indian rupee.
“Buyers now feel that prices have bottomed and are willing to make purchases,” said a trader.
Following the price hikes on 1 January, PE list prices were at Rs93.50-96.00/kg ($1.72-1.76/kg) DEL (delivered) India for LLDPE, and at Rs97.00-98.00/kg DEL India for HDPE film, inclusive of a 12.3% excise duty.
HDPE 100 natural pipe grade was at Rs103-105/kg DEL, while HDPE 80 natural pipe grade was at $97-101/kg DEL.
LDPE general purpose film grade was at Rs99.0-99.50/kg DEL India.
In the west Indian open market, discussions of LLDPE and HDPE film imports and locally-produced material were Rs0.50-1.50/kg higher, buoyed by the higher domestic list prices and actively restocking activity.
Prices of LDPE film edged up Rs1.50/kg on the lower end, to reflect the absence of lower-priced cargoes as local sellers raised offers, in tandem with the firmer international prices.
On 4 January, spot LDPE film prices were at Rs98.00-98.50/kg DEL west India, LLDPE film prices were at Rs95.50-96.00/kg DEL west India and HDPE film prices were at Rs97.00-98.00/kg DEL west India, local traders said.
Major producers of PE in India include Reliance Industries, GAIL, Indian Oil and Haldia Petrochemicals.
Additional reporting by Ong Sheau Ling
($1 = Rs54.48)
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