India’s PP, PE markets extend declines in Sept; will post-monsoon demand kick in?

The ongoing monsoon season has dampened sentiment in India’s polyolefins markets, with predictions of heavy rainfall through September and October continuing to suppress downstream demand and pressure prices. Traders indicate that the prolonged wet season may continue to weaken sentiment over the next month. However, some voices are anticipating a potential market turnaround, expecting buying for the post-monsoon season to begin by mid-September.

PE film import prices have already dropped significantly since early July, with LDPE falling by about 13%, and LLDPE, HDPE, and homo-PP raffia grades declining by around 7%, as plotted by the ChemOrbis Price Index. Over the past month, LDPE film prices have decreased by $105/ton, LLDPE film by $25/ton, HDPE film by $35/ton, and PPH raffia by about $30/ton.



The midpoint of the LDPE film import price range has fallen significantly over the past two months by $160/ton, with the latest prices assessed at $1105-1135/ton CIF India. LLDPE film prices have dropped by $70/ton to $940/ton, and HDPE film by the same margin to $955/ton, all CIF India, cash. Homopolymer PP raffia prices have seen the midpoint decline by $75/ton to $870/ton CIF India, cash.

Downstream demand stays sluggish

“Downstream demand for both PP and PE have stayed in the doldrums, with the country’s weather office predicting stronger monsoon rains ahead. At the same time, we’ve seen players pointing to the likelihood of buyers typically returning to the market for the post-monsoon seasonal demand,” a trader based in New Delhi said.

Latest spot offers from Middle East producers have been significantly lower than the previous month, reflecting the continued bearish sentiment across the Indian market. “We haven’t seen any confidence from buyers in India yet. Most players are in a wait-and-see mode, and with stronger rains predicted ahead, we may not see them coming out to buy large volumes in the weeks ahead,” a Mumbai-based trader said.

Strong monsoon dampens markets

According to another trader, LDPE has been the most affected by the prevailing bearishness. LLDPE film prices have also dropped, though traders note that the grade is tighter than other PE film products.

The monsoon has severely impacted HDPE pipe sales, although a revival is expected in the near term. “We may see a revival in sales ahead if players return to buy, particularly if there are clearer signs of increased government spending on infrastructure,” a trader in Delhi said.

As for PP grades, buyers continued to wait for downstream demand to pick up before making any significant purchasing decisions. “The downstream demand has to improve before buyers return,” another trader said. He also pointed out that domestic prices were more competitive on an import parity basis. “We may remain on the sidelines unless there’s a significant demand revival. There’s no point in importing till then,” he added.

Most players stay on the sidelines

Most players observed that PP and PE buyers are staying on the sidelines, although they typically return around this time of the year for post-monsoon shipments. “We think the strength of the monsoon this year has spooked players. At the same time, we don’t see any availability issues for any of the polyolefin grades,” an Indian trader said.

At the same time, the extension by the Bureau of Indian Standards (BIS) in implementing its quality controls over imports of PP grades have given some breathing space for market players. “This extension may mean buyers can look at committing to more shipments for a finite period of time without the fear of the BIS controls. It also gives suppliers more time to adjust their configurations to meet the standards, enabling them to continue selling to Indian buyers,” the Mumbai-based trader noted.