Strengthening domestic supply to impact India’s polypropylene imports that were robust in H1

06-Nov-09
India’s Polypropylene imports for the six month period until September 2009 had increased almost three fold vs last year to 230,000 tons. This dramatic increase in import volumes that was driven by strong demand may be difficult to maintain. As domestic supplies get increasingly robust, India’s imports are expected to halve from 40,000 tons/month in this period to 20,000 tons/month in the next two quarters, as per ICIS. Supplies in the country have strengthened with near 100% run rates at the newly started up 900,000 tpa PP plant by Reliance Industries in Jamnagar. Imports are estimated to decline in the year 2010-2011 to just a little above the 2007-2008 levels to 260,000-270,000 tons, subject to the intensity of domestic consumption. For the fiscal ending March 2010, India’s PP imports are estimated to spike at an annual rate of 28-40% to 320,000-350,000 tons, according to industry estimates. Consumption is expected to grow in double digits this year from the 1.8 mln tons recorded in 2008-2009. However, imports may not get majorly impacted as the market begins to feel the effect of supply tightness caused by the 10-week shutdown at Haldia Petrochemicals’ PP plant. The plant has been shut since end of October and comprises a 520,000 tpa naphtha cracker, a 550,000 tpa polyethylene plant and 270,000 tpa polypropylene plant.
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