Turnarounds, dollar strength support India’s import PP, PE markets

India’s PP and PE markets have mostly recorded price increases over the past month, driven by regional plant turnarounds and the strengthening US dollar against the Indian rupee. Players are mostly expecting a stable to firmer market in the near term.

“Import prices have risen, but with Indian plants resuming operations and buyers having secured sufficient stock for the coming month, a significant supply crunch is unlikely. At the same time, a continuing strengthening of the dollar against the rupee may increase import costs, while turnarounds could also support bulls,” a source at a domestic producer said.

“Domestic prices rose by up to 7% over three to four weeks starting in early January as regional turnarounds tightened supply. Since then, prices have largely stabilized. Increased local buying helped support the market, though demand has slowed recently. Still, supply constraints from turnarounds may keep prices firm ahead,” he added. Some traders, however, noted that availability was currently not as much of an issue as a month ago in the local PP and PE markets. For PP, Chinese availability was a major factor that hindered any runaway bullishness.

Indian import prices keep rising after CNY

ChemOrbis Price Wizard data shows that polyolefin import prices from the Middle East into India have climbed by $5-40/ton since the Chinese New Year holiday, when most Asian markets were closed. PP raffia, LDPE film, and LLDPE film prices have reached near seven-month highs, while HDPE film is at a three-and-a-half-month high.



Turnarounds may support PE levels

Traders reported that buying indications for HDPE film have slightly declined over the past few weeks, whereas LDPE and LLDPE film prices have remained firm. Ongoing and upcoming turnarounds could continue supporting PE price levels.

“There was certainly tightness in LDPE film about two or three weeks ago, but we don’t see any unusual buying interest in the grade lately,” a Delhi-based trader said. “We may see prices of all PE grades moving in a stable to firm fashion in the weeks ahead but we’re not banking on any big spikes,” the source at the producer added.

In India, HPCL-Mittal Energy Limited shut PP and PE units at its Bhatinda refinery in early January and restarted in late January, while Reliance shut its polyolefin units for about 20 days from January 20. Haldia Petrochemicals is to shut down its propylene and PP units for 46 days from mid-April. The Brahmaputra Cracker and Polymers also shut its PE units because of technical issues in mid-January, with the restart date not known.

In the Middle East, the Saudi Aramco-Sumitomo joint venture Petro Rabigh is starting a 91-day shutdown in mid-April of LDPE, LLDPE, and HDPE plants totaling about 1.05 million tons/year capacities. Borouge in the UAE has shutdowns beginning mid-April of LDPE, LLDPE, and HDPE plants totaling 1.4 million tons/year capacities.

Sellers are reportedly offering Middle Eastern LDPE film at up to $1160/ton CIF India, though most trades remain below $1130/ton. HDPE film is being traded around $940/ton CIF, with selling ideas reaching $970/ton. LLDPE film sellers are aiming for $980/ton, but bids remain below the mid-$900s CIF India.

Lower freights ease Chinese PP flow into India

As for homo-PP raffia, a trader said Middle Eastern prices were $40/ton higher from a month ago. “But there’s definitely availability of Chinese origins sold through traders at $20-30/ton lower than the low end of the assessments of Middle East origins into India. There is good demand for Chinese raffia origins in a $940-960/ton CIF range. Availability is also not a big issue,” he added.

Meanwhile, freight rates from China to the Indian west coast have fallen to a $40-50/ton range, from $50-60/ton a couple of months ago, which have facilitated a smoother flow of Chinese origins of PPH raffia into India, traders said.

Indian producers may issue incentives

Another trader expected Indian producers to announce bulk buying incentives to domestic players in the near term, which could possibly increase procurement.

“There are holidays ahead which could prompt local sellers to notify these incentives. This would probably increase local buying and possibly prevent import sellers from raising prices too much despite any supply squeeze ahead,” he added.

Credit lines turn expensive as dollar strengthens

Meanwhile, the rupee’s depreciation against the dollar has reflected increased caution among importers, who are hedging to mitigate currency risks as they prepare for persistent dollar strength ahead and its impact on profits.

The import markets are sensitive to exchange rate fluctuations and could be affected by any higher US tariffs by the new administration. The weak rupee has turned dollar credit lines expensive for importers.