SINGAPORE (ICIS)--India’s spot polypropylene (PP) price outlook remains bearish as domestic availability is set to improve in the near term from the current tight supply situation, market sources said on Thursday.
Availability in the local market is tight, owing to shutdowns that began at a few facilities in April, market sources said.
Despite this, the appetite for imports stayed largely weak on the back of expectations of improved domestic supply when the turnarounds are completed, market sources said.
“The current [high] trend in PP prices is unlikely to sustain given that supply will resume to normal when the shutdowns are completed,” an Indian importer said.
Indian major Reliance Industries Limited (RIL) undertook a shutdown at its 440,000 tonne/year PP unit in Hazira, Gujarat in end-March that tightened PP availability in the country.
Separately, producers HPCL-Mittal Energy (HMEL) and Mangalore Refinery and Petrochemicals Limited (MRPL) also undertook turnarounds at their facilities in April curtailing domestic availability, market sources said. Both these plants are designed to produce 440,000 tonnes/year of PP each.
However, a reduction in the regional producers’ posted prices announced for May shipments hampered sentiments, market sources said.
On 1 May, Indian PP producers reduced list prices for all PP homopolymer grades by Indian rupees (Rs) 1.50/kg for May shipments.
According to market sources, the reduction was brought on in line with the strengthening in the Indian rupee as well as tracking bearish sentiments.
A persistently wide spread over Chinese import prices also continued to affect buying sentiments.
A continued weakness in the Chinese PP import values as well as a lack of momentum in the futures market also capped buying interest for Indian imports, market sources said.
“We initially felt that China prices would catch up with those in rest of Asia, but that hasn’t happened. China remains weak so we don’t expect this wide a spread to sustain,” an Indian trader said.
“Either China prices have to move up or Indian PP prices have to come down, and until then it is risky to import,” the trader added.
On 28 April, ICIS assessed PP raffia/injection import prices at $1,100-1,140/tonne CFR India, down $20/tonne at the low end from the previous week.
Focus article by Veena Pathare