India’s LDPE film demand strengthens; other polyolefins languish

India’s LDPE import prices have hit near 7-month highs on the back of tighter supplies and higher seasonal demand, while other PE and PP markets have remained mostly stable over the past month, stuck between the lack of demand and ongoing turnarounds.

ChemOrbis Price Index data show LDPE film prices for Middle Eastern origins have risen over the last one month by about $20/ton, with the midpoint of the current weekly assessments of the grade at $1155/ton CIF India, cash. On the other hand, HDPE and LLDPE film have stayed at the same levels as a month ago at $955/ton for the former and $970/ton for the latter, both on CIF India, cash basis. PP raffia weekly prices are currently assessed at $985/ton CIF at the midpoint, the same as four weeks ago.

Data also show LLDPE film import prices at a near seven-month high, while the HDPE price midpoint is at a four-month high. Despite mostly moving sideways in the past month, PP raffia import prices are currently at an eight-month high.



LDPE demand outpaces other polyolefins

Demand for most of the polyolefin markets were noted to be dull, although turnarounds in India as well as in the Middle East have kept prices supported during the month. As for domestic prices, traders said LDPE levels have seen an increase in tandem with the import prices over the last one month, although other polyolefin markets have seen a flatter trend.

Market participants said the seasonal demand for LDPE was driving the price momentum in that grade. “There’s buying only in LDPE because of demand for shrink wrap film for packaging, as well as for LDPE tarpaulins for protection from rains ahead of the monsoon that starts in June,” a marketing source at a major public sector refiner said. “We expect this demand to continue in the near term as buying continues for the finished goods of LDPE film,” he added.

Talk of technical issues at LDPE plant

At the same time, a trader pointed to some talk in the market of technical issues with an LDPE plant of a refiner, which was also aiding the bullishness in that grade. “There’s already some tightness in LDPE, and the current talk pointed to the possibility of a further squeeze in availability,” he added.

Meanwhile, players said the other grades were not seeing any market-moving developments and buying was moving at a sedate pace for both LL and HD film, as well as PP raffia. “These grades should have picked up some momentum in the first quarter, but after a surge in the earlier part of the first quarter, the markets have mostly moved in a sideways fashion,” the trader said.

Crude oil futures suggest pressure on prices

Players also pointed to the sharp slide in crude oil futures as a bearish factor in the polyolefins market. The weekly average of Brent crude futures plotted by ChemOrbis Price Wizard, shows a fall of more than 9% over the last one month.

“The fall in crude futures, coupled with a slide in feedstock costs, could impose pressure on producers to pare down offers, especially as demand has not strengthened for most polyolefins in India,” the source at the public sector producer said.

Festivals ahead may keep players away

The producer source also pointed to the major North Indian festival of Holi later this week, which is keeping a number of players out of the market on extended leaves.

“There is also the ongoing Islamic fasting month of Ramadan, which normally keeps some players away, especially as it culminates in the festival of Eid,” he said. “And, typically the first quarter of the 2024-25 fiscal year may typically be a dull period for the PP and PE markets,” he added.