Import PP prices signal recovery, PE yet to follow in India

The easing of COVID restrictions in Chinese cities and the return of buying appetite in the local markets have arrested the downtrend of PP prices in India after almost two months, but PE sentiment remains relatively weak as major domestic plants return after turnarounds.

“PP prices are unlikely to slide further and the near-term looks stable to slightly firm,” said an Indian trader. “Domestic demand has improved. Order books have started to come alive. End-user customers have started buying,” said a Mumbai-based trader.

Traders said homopolymer PP raffia and injection prices, which had fallen to the low-$1300s/ton CIF India levels a couple of weeks ago, have since regained some lost ground, with Middle East origins being quoted in the mid-$1300s/ton CIF, around the same level as in mid-May.

PP supplies shrink on prolonged buying inactivity

Apart from the Chinese reopening after the lockdowns, traders said there’s perception of a certain limitation in availability because of extended buying inactivity as players sat tight expecting prices to keep on falling.

“This is perhaps typical of a price-sensitive market like India’s. But Indian players also return in droves when they see prices starting to rise. The Chinese opening up was certainly a trigger, but there’s also the expectation that PP prices may keep rising, following the current crude oil trend. We seem to be seeing this now. Buying ideas have certainly seen a turnaround although offers are few and far between,” said another trader.

LDPE import offers sharply down

LDPE film offers were heard in a $1530-1500/ton range, sharply down from prices ChemOrbis reported on May 17 in the mid-$1600s/ton CIF, compared to $1680-1690/ton in end-April.

“There are adequate supplies of LDPE in the Indian market and it’s not a high-demand season,” said an Indian trader. “We may see prices under pressure in the next couple of months, unless a spillover impact is seen from the improving PP sentiment” the trader added.

LLDPE, HDPE supplies to rise as plants come back on stream

On the other hand, LLDPE and HDPE prices are currently looking at ample availability as plants which were shut down for maintenance are coming back on stream. “There’s pressure on prices as availability is slated to improve ahead. Import prices have been reported to be lower than local prices”, the trader said.

Both LLDPE and HDPE were quoted during mid-May in the low-to-mid $1400s/ton, but currently prices are being reported in the mid-$1300s/ton CIF India. “There is certainly pressure on import offers, which are currently priced lower than domestic offers,” he added.

Increases in LLDPE and HDPE prices since April have coincided with reports of turnarounds in Indian plants such as the ONGC Petro additions Limited (OPaL), which has 720,000 tons/year LLDPE/HDPE swing units and a 340,000 tons/year dedicated HDPE unit and Brahmaputra Cracker and Polymers Limited (BCPL), which has a 220,000 tons/year HDPE/LLDPE swing unit.

Traders said the return of the plants from turnarounds would increase supply in the domestic market and would lessen the reliance of imports. “The plants have started to come on stream and production will be in full swing by the end of this month,” said a trader.