July PP and PE import prices into India rise amid tighter supplies

Contrary to the typical bearish trend during monsoon, Indian import prices of PP and PE are mostly higher from a month ago mostly because of tighter availability, although a dull trading environment prevailed, with deals few and far between. Most market participants expected a general uptrend in the prices of polyolefins, across different grades, going into July.

The supply squeeze has resulted from the current shortage of containers, which has made trading of polyolefins difficult, with freight rates rising three-fold or more in some sectors since mid-April.

Weather office predicts copious rains in July

Meanwhile, the monsoon has already covered the entire country, although the total rainfall is still about 7% below average so far, India’s weather office said. But the India Meteorological Department said early this week that above-average rainfall was likely in July, sparking hopes of higher farm output and economic growth, factors important in raising polymer demand levels. Typically, the monsoon rains reach the southwestern Indian state of Kerala in early June and move northwards to cover the entire country by the second week of July.

Traders said the prospect of copious rains lashing India in July could mean a rejuvenated farm sector, leading to higher sales of polymer products, with PP and PE sales likely to see increased buying starting mid-July for the post-monsoon demand. For the moment, the container freight rate surge was crimping supplies and raising prices of polyolefin imports to India, although the monsoon has limited buying activity. However, the freight increases may continue rising or be maintained at the current high levels at least till the end of the year, keeping prices high.

ME PP prices surge to almost 1-year high

Traders have noted a $40-60/ton increase in the price of PP raffia and injection import offers into India over the past one month, with offers reported in a $1030-1060/ton CIF India. However, they said it was unlikely for deals to be sealed above a $1040/ton mark.

As per ChemOrbis Price Index data, the weekly average of Mid-Eastern homo-PP raffia and injection prices has climbed to the highest level since August 2023.

“Demand is not too bad, but we think the shortage of containers is the issue that is lifting the PP markets. Traders are finding it difficult to book container space to ship material from China to India before early August, for shipments arriving here later in the month. And, for many of us, it’s a bit too early to take that decision,” said a trader based in New Delhi.

However, prices remained firm because of shipping delays as finding containers remained a problem. “The higher freight charges have meant PP import prices surging,” he added. Freight rates from China to India that were noted below $50/ton in mid-April are currently being quoted in the mid-$100s/ton or even higher, with one source pointing to a $200/ton rate that could not be confirmed.

LDPE film continues to rally, reaching highest level in 2 years

An ongoing supply squeeze coupled with better demand kept LDPE film import prices to India on the uptrend, with the weekly average of prices reaching around two-year highs. LDPE film prices that broke above the $1200/ton CIF India threshold in early June, are currently being reported at tradable levels in the high-$1200s/ton, with offers heard as high as $1300/ton.

Although offer levels have been surging, buying interest hasn’t really increased, with stiff resistance being noted at the high-end prices, traders said. “We don’t see a lot of buying even at the low ends but some traders who haven’t bought for a long time may have come in to secure some supplies fearing prices continuing to rise,” a Mumbai-based trader said.

Tighter supplies reported in LLDPE film

As for LLDPE film, most pricing indications were heard above the $1000/ton CIF India mark, with the market being lifted by tighter supply, firmer demand and better sentiment. A month ago, prices hovered in the high-$900s/ton CIF India levels.

“There are even higher prices heard in the market but as buyers continue with their resistance, it may take some time to reach those levels,” a trader said. He expected demand to strengthen in mid-July as buyers return to the market for post-monsoon requirements.

“As for LLDPE, we have enough local sources to fall back on and sourcing our requirements locally could be better for us, as we can take the current shipping woes out of the equation,” another trader said. But he also agreed, the freight rate increase may prompt suppliers, especially from the Middle East, to keep their India import prices higher.

Suppliers talk up HD prices, but buyers look away

In trade discussions, sellers kept talking up HDPE film prices, with fewer offers being reported, but buyers remained uninterested in high-end prices. But prices rose slightly as demand was noted to be slightly firmer, because of the container space limitations, which raised discussion levels, even as supplies in the domestic market were considered moderate.

Trading indications from different sources pointed to HDPE film being noted in a $1010-1040/ton range, higher by $10/ton from a month ago. A domestic player said there was a general uptrend in the Indian PE market and at least a $10/mt rise in import discussion levels.