Improved buying interest props up domestic markets in India

Domestic producers in India have started the month of April with new price hikes, report players as per ChemOrbis. When compared with the most recently reported March prices, domestic prices were raised by INR1500-4000/ton (US$29-77/ton) for LDPE, INR2000/ton (US$38/ton) for LLDPE, INR1500/ton (US$29/ton) for HDPE, INR2500/ton (US$48/ton) for PVC and INR3000/ton (US$58/ton) for both homo-PP and copolymer PP. The main driver of these price hikes has been the depreciating local currency, which renders import cargoes unfavorable for Indian buyers purchasing in US dollars and selling in rupee. The situation has been compounded by import markets for PP, PE and PVC maintaining their upward trend for April, adding to buyers’ reluctance to engage in purchases on import basis. Accordingly, buyers prefer to meet their requirements from the local market, where they can source materials with prompt availability. All of these factors have resulted in improved demand for the local market and paved the way for domestic producers to announce higher prices this week. A distributor offering PP, PVC and PE in local terms commented, “Our sales are good despite the recent spike in prices as supply is somewhat less than usual.” He pointed out that IOC is planning a maintenance shutdown by April 8, while Gail has not yet resumed operations. Another distributor reported, “LDPE demand has picked up recently as buyers have switched from LLDPE to LDPE due to high LLDPE prices.” He added, “I have received some re-export LDPE offers from China but I am not interested in these offers as they are not competitive enough.” A trader in New Delhi also reported receiving import PP offers from overseas sources with US$10-25/ton increases from last week. He told ChemOrbis, “PP demand is stable in the local market as imports are not favored by buyers. We are considering buying PP from the import market whenever we come across some attractive prices.” A distributor in Mumbai receiving higher PVC offers from domestic producers also confirmed healthy local demand and slower activity in the import market. “Most buyers prefer to source their needs from the promptly available local market,” he said. He also highlighted, “Supply has slightly diminished recently as many resellers have skipped replenishing stocks from the import market given rising global prices as well as the depreciating rupee.” He reiterated that their sales are satisfying at the moment. A PVC calenderer reported his intention to replenish some stocks from the local market, commenting, “We are not sure about the sustainability of the current upward trend in the global PVC market. We think that PVC prices will be adjusted lower upon growing resistance from buyers by next month. Thus, we would rather meet our requirements from the local market instead of imports.”