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India’s PP and PE markets continue to tumble

by Shibu Itty Kuttickal - sikuttickal@chemorbis.com
  • 14/06/2023 (02:08)
India’s PP and PE markets remain bearish for the fourth month in row as demand has weakened amid the current monsoon season, with a supply overhang also keeping buyers away. ChemOrbis Stats Wizard reveals that a record amount of PE was imported in Q1 while PP imports were also near their all-time high.

Both the polyolefin markets started the year with price increases but turned softer in March and have stayed on a downward path since then as a result of higher availabilities, especially from the Middle East. As the monsoon season has started, buyers have mostly moved away from the markets. Most activity is focused on the local markets, considered more competitive than imports.

Stats: Q1 HDPE imports see three-fold increase in India

ChemOrbis Stats Wizard points to HDPE imports rising to around 485,000 tons in the first quarter of the current year, or by more than three times that of the same quarter of 2022; while LDPE and LLDPE imports in the same quarter rose year-on-year by about 62% to more than 443,000 tons.

All Q1 PE imports suggest a record high for India, surpassing 900,000 tons and outpacing the previous record set in Q4, according to Stats Wizard.

Stats: Q1 PP imports double

PP homopolymer imports stoodat more than 357,000 tons, almost twice as much as in Q1 2022.

Although there was a big yearly increase in Q1 PP imports this year, they fell slightly short of the previous quarter, Q4 2022, when an all-time high was achieved in quarterly imports.

Spiking PP and PE import volumes add to growing local stocks

Higher availabilities from the Middle East may also mean further bearish pressure on the Indian markets.

Traders said the ample supplies in the local market have resulted in imports continuing to get less competitive when compared to local prices. “The supply overhang has resulted in local prices getting cheaper than imports. May imports of both PE and PP are also higher than the same month of last year and we feel prices are set to slide further in the weeks ahead,” a local trader based in New Delhi said.

All prices on the downtrend

Traders reported the import low-density PE film grade to have fallen by about $60-70/ton from levels noted in mid-May to trade mostly below the $1000/ton levels to $960-990/ton CIF India, cash.

LLDPE film and HDPE film prices in the Indian import markets have been quoted higher than LDPE in a $980-1010/ton price band. HD film prices were reported at $1060-1080/ton and LL at $1050-1070/ton, both CIF India around the middle of last month. Traders said higher availabilities in HDPE have lately eased the upward pressure somewhat on that grade.

Traders said shipments of PPH raffia, especially from the Middle East, were mostly being quoted in the low-$900s/ton CIF India, cash, compared to a $1000-1030/ton CIF India about a month ago. “We’ve also seen raffia offers lower than $900/ton CIF, but our requirements are not much currently, and we think prices could fall even further in the weeks ahead,” said a regional trader.

Sellers eye post-monsoon demand for a price rebound after months of downturn

A source at a producer did not see the downtrend as extraordinary. “The downtrend in polyolefin prices was expected because of improved availabilities and weak demand. Prices will look up once the post-monsoon demand sets in sometime next month. The current scenario is one of players continuing to wait for the right time to buy at even lower prices but we’re not looking at an endless erosion in prices. We don’t think there’s a slide in consumption,” he said, adding that the slide is also a reflection of the overall bearishness in most Asian markets.

Slide in olefin prices keeps PE, PP outlook bearish

Others pointed to the continuing fall in olefin prices as a cue for producers to reduce prices further. “Both ethylene and propylene prices have almost been on a free fall since April. The falling costs have to be reflected in the PE and PP prices too. But we find import sellers still hesitant to let go of shipments at lower levels,” a trader said.

Asian ethylene prices have fallen by 21-22% since early April, while propylene has seen a 22-25% fall over the same period.
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