India PP, PE markets’ slump extends into third month ahead of monsoon

Bearishness has prevailed in India’s import PP and PE markets as demand remains weak just weeks ahead of the start of the monsoon season amid an ample supply situation. Having started 2023 with increases, the markets turned softer in March and has remained on the downswing since then as import arrivals, especially from the Middle East, have kept strengthening the supply situation.

Traders said the bearish crude oil and feedstock markets have also depressed the sentiment recently in the polyolefin markets, despite increases noted early in the current week.

No stockpiling, only bargain-hunting

“It’s not that people haven’t been looking for shipments. But we are mostly seeing players hunting for bargains at the low ends, rather than resorting any stockpiling, as they believe prices may continue to fall,” an Indian seller said. The monsoon months ahead could also further depress demand for polyolefin shipments at least in the next two months or more, he added.

Traders said shipments of PPH raffia, especially from the Middle East, were being quoted at 1000-1030/ton CIF India, cash. There were numbers also quoted much lower than the low-end of the range that players mostly regarded as “outlier” levels, not representative of the current market.

But the return of the Middle Eastern producers from turnarounds has meant availabilities burgeoning in the Indian market. Comparatively, following the crude oil price surge in the previous month, traders had quoted Chinese shipments of PPH raffia at $1040-1060/ton CIF India, mostly unchanged from levels heard in March.

PE prices keep falling but supply shortage underpins HD

The low-density PE film grade has stayed a less-sought-after grade in the Indian market, a trend that is in evidence in most of the Asian markets. Supplies of the high-density film grade are considered tighter than both LDPE and LLDPE, a fact that somewhat supported the former.

LLDPE and HDPE prices in the Indian import markets have been quoted $10-20/ton higher than LDPE, which typically commanded a premium over the other two grades.

Prices of all grades were noted lower in the latest week. LDPE film prices have fallen below the $1050/ton mark and are currently noted in a 1030-1060/ton CIF India level. LD had been quoted in a $1080-1120/ton CIF price band in India in the second week of April.

HDPE is being quoted at a higher delta to LDPE, with prices reported at $1060-1080/ton CIF India levels. HD levels are also slightly higher than LL prices, quoted at $1050-1070/ton CIF. Both HD and LL prices were slightly lower than the previous month’s numbers. Traders said requirements of HDPE in the construction and irrigation sectors have supported HDPE although the overall bearishness has meant lower prices.

India reflects overall Asian bearishness

The seller said there was no cause for concern currently at the downtrend in polyolefin prices. “Price drops are bound to happen as demand remains weak but at some point, in the weeks ahead, we expect a turnaround. We are not seeing a big erosion in consumption. People are simply waiting for prices to keep falling, which won’t happen in an endless manner,” he added.

But an Indian trader said prices keep falling in the Indian market, which is a reflection of the bearishness all over Asia. "There is ample availability in the Indian market that is pressuring prices even further. There are of course players trying to hunt for bargains, but overall buying interest has been depressed. We don’t expect a revival in the near term, especially as monsoon is round the corner,” he added.