Polymer demand takes a heavy knock from deepening COVID crisis in India
India has been hit by a second wave of the pandemic like no other country in the world. Its total tally of COVID-19 cases has crossed the 20 million mark, with over 5 million infections being added in just 15 days.
Converters are either shutting down whole plants, shutting down units, or reducing plant runs.
“People are scared and converters are shutting down plants, with many of them affected by the shortage of casual labour. When 5-10 people working for a conversion plant get sick, small-scale conversion units are not able to function,” a Mumbai-based trader said.
At the end-user market level, widespread restrictions in place after the second wave struck meant there was little consumption.
More than half of converters are likely to be impacted by the current crisis, a polymer producer said. “It looks more like a labour issue. People are not confident to work in the current situation and you can’t really blame them,” he said. “And downstream plants do not have the confidence to keep working.”
The impact is already being felt. “We’ve already seen 50% or more of the downstream units being shut this month. And, I don’t think we’ve seen the end of this phase,” said a source at a company that manufactures PVC and HDPE pipes.
Players expect 30-40% contraction in demand
Obviously, such a situation would have an impact on imports, exports and domestic trade in polymers. “I expect at least a 30% decline in demand from the downstream,” the producer said. A trader said he expected a demand contraction of up to 40% for all polymers.
The ChemOrbis Stats Wizard shows India’s total yearly imports of all polymers had risen by about 160% in the 10-year period to 2020 to 4,880,010 tons. Exports during the same period nearly doubled to 2,662,100 tons.
Market participants put the total consumption of all polymers, including PP, PE, PET, PS, PVC and ABS, at about 8.5-9 million tons annually.
“If any producer hasn’t already reduced plant runs, it should be doing so soon. Inventory levels should be piling up everywhere,” a trader added.
More free plastics newsPlastic resin (PP, LDPE, LLDPE ,HDPE, PVC, GPS; HIPS, PET, ABS) prices, polymer market trends, and more...
- Will Europe’s PE market manage to defy pressure in December?
- Turkey's polymer markets deadlocked as lira’s freefall shatters all records
- Homo-PP downturn in full swing in China
- Bearish pressure mounts on SE Asian PE markets
- Oil faces demand pressure from renewed Covid-19 fears
- Europe PET market hovers around a decade-high, Asia stumbles
- Turkey's import PE market set to reverse course in December
- Sentiment in China PP, PE markets turns bearish again
- Taiwanese major’s Dec PVC price cuts deeper than expected
- Egypt’s PP, PE prices see corrections as buyers resist firm offers