Growing imports, low domestic demand lead to polymer price reductions in India

21-Oct-10

Indian polymer producers have announced price reductions in polypropylene (PP) and polyethylene (PE), as imports grow amid low domestic demand. Demand is low because during the festive season of Diwali, converters run plants at reduced capacity. This trend is contrary to the rising petrochemical prices globally. In the global markets, as crude oil prices rise, polypropylene (PP) price has risen by US$30, and polyethylene (PE) prices have gone up by US$50 compared to previous month’s price amid supply constraints caused by maintenance shutdowns. This is the first time since May that prices have been reduced in India by producers. PP has come down from Rs 84/kg to Rs 82.75/kg, high density polyethylene (HDPE), prices have fallen by Rs 2 to Rs 77/kg, and low density polyethylene (LDPE) prices have dropped by Rs 4 to Rs 97/kg. Uptil now, Indian polymer producers kept prices very high despite falling crude and global polymer price. Even with the current price reductions, polymer prices in India are still not at par with global levels. As newer capacities come onstream in India, pricing of polymers will be critical. The Indian market is slightly oversupplied due to expected added capacities and rise in imports as other regions face dwindling demand.