PP prices to extend bullish run into February in India
Import offers of PPH raffia were reported at $1350-1390/ton CIF India for February delivery cargoes, about $30-40/ton higher than prices reported about a week ago.
Apart from the strength in the energy complex, a trader associated with an Indian producer also pointed out that import prices here are tracking the strength in markets across the globe. “Offers from Asia have dried up ahead of the Chinese New Year (CNY) next week. And we hear about production issues in Thailand and Indonesia which could squeeze supplies to the sub-continent,” he added
A few deals were sealed for Middle East origin PPH raffia at $1370/ton CIF India, cash. Another trader said a major PP supplier from the UAE was offering PPH raffia cargoes in the mid-to-high $1300s CIF. He said the currently higher demand is mostly for the PPH raffia and film grades.
It is not only robust buying, but also reduced supplies
“There are buyers at those levels as they think prices are on the way up. We don’t see a lot of offers from Asian producers currently as we’re very close to the CNY holidays, apart from the production issues. But there are offers from the Middle East, mostly from the UAE, which have continued to rise since early this month,” he added.
Players have resorted to inventory build-up as they fear price increasing as a result of the strength in oil prices and crimped supplies because of the continuing container crunch in Asia.
Local market to follow suit
Brent crude prices have jumped about 26% since end-November, while Asian propylene prices have risen by about 7% during the same period.
“We don’t see a solution to the shipping issue in the near future, at least not this quarter,” said the trader. “This would continue to squeeze domestic supplies and is certainly bullish for the PP markets,” he added.
A major Indian producer has kept domestic PP offers stable during the week but a trader said there could be an upward revision next week, dictated by the import market strength.
India PP imports hit a record-high in 2021
As one of the top 5 manufacturers of PP in the world, Reliance Polymers has an annual production capacity of 2.7 million tons. Thus, the local demand is largely met by domestic production.
However, buying appetite for imports has also been growing in India over the years, with 2021 imports hitting a record-high. January-November PPH imports of India moved above 730,000 tons.
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