02 September 2013 11:02 [Source: ICIS news]
SINGAPORE (ICIS)--Indian producers increased their domestic prices of natural high density polyethylene (HDPE) pipe grade for September delivery on 1 September, but buyers said on Monday that they will find it hard to pass on the additional costs to their customers.
Indian producers raised their prices of natural HDPE 100 and HDPE 80 pipe grade by Indian rupees (Rs) 9/kg ($137/tonne) to Rs120.50-122.00/kg DEL (delivered) Mumbai and Rs118.50-120.00/kg DEL Mumbai respectively, to compensate for the steep fall in the value of the Indian rupee against the US dollar.
Suppliers said they had seen a huge run-up in energy costs because of the plunge in the value of the Indian rupee, which depreciated by more than 11% in August to touch a low of Rs68.44 against the US dollar on 28 August, but it gradually recovered to Rs65.71 on 1 September.
“It is true that the Indian rupee depreciated in August, but it has begun to bounce back, so we are hoping that the producers will offer some discounts, keeping this in mind,” said an Indian end-user.
Demand, especially from the irrigation segment, has begun to pick up with the end of the monsoon season in late August, end-users said.
“The rainy season, which lasts from late June to late August, is typically a period of low demand for pipes,” said a trader.
However, the increase in domestic prices has dampened buying interest, said a separate end-user.
“Everyone is now adopting a cautious stance, watching which way the rupee goes before committing to purchases,” said the end-user.
Major producers of PE in India include Reliance Industries, GAIL, Indian Oil and Haldia Petrochemicals.
($1 = Rs65.71)
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