- Coronavirus battered PE prices in India local market
- Buyers preferred to wait on the sidelines as lockdown extended
- India PE market predicted to remain subdued after the lockdown
During April 2020, Indian PE market was severely battered by the Coronavirus outbreak. Based on data collected by SSESSMENTS.COM, there were no deals concluded for local as well as import materials during April. The leading Indian petrochemical producer made a downward adjustment of INR1,000/ton ($13/ton) on HDPE Film offers and INR2,000/ton ($26/ton) on LLDPE Film C4 with effect from April 1. The producer made a further reduction with effect from April 10. Offers for HDPE Film and LDPE Film were adjusted down by INR3,000/ton ($39.5/ton) and INR2,500/ton ($33/ton), respectively. Likewise, offers for LLDPE Film C4 were also down by INR4,000/ton ($53/ton).
In the import market, offers for import PE cargoes were hovering around $700/ton-level within the week commencing April 6. Some market players informed SSESSMENTS.COM on receiving offers for Middle Eastern HDPE Film and LLDPE Film C4 cargoes at $720/ton and $730/ton respectively, on LC at sight, CIF India Main Port basis. For the US cargoes, import HDPE Film offers were available at $700/ton on the same payment and delivery terms. At the last week of the month, commencing on April 27, Saudi HDPE Film cargoes were available at $40/ton lower than the offers available in early April. However, the lower import offers failed to attract buyers as most were expecting a bigger reduction taking into account the slump in crude oil prices.
India PE market was muted as the country has been under Coronavirus lockdown since March 25, shutting down all modes of public transportation, non-essential services and educational institutions. Initially, the lockdown was set to expire on April 14. However, as the number of confirmed cases continued to rise, the lockdown got extended to May 17. To revive economic activities, the government allowed some factories to resume production with effect from Monday, April 20. On the production front, SSESSMENTS.COM was informed that GAIL Ltd had shut its two HDPE units located in Pata, India with a capacity of 100,000 tons/year each. Likewise, IOCL also shut the company’s 200,000 tons/year ethylene line amid the lockdown. Haldia Petrochemicals Ltd (HPL) shut its cracker and polymer plants following the lockdown imposed by the government. At the final week of the month, HPL was reportedly running at 70% of total capacity. From the converters’ side, production activity was only running at 20-30% from the total output.
Entering May, Indian market players foresee PE market to remain slow as most of the traders focus on releasing the inventory or looking for working capital to re-run the supply chains that were cluttered by the Coronavirus pandemic. At the moment, market players are still waiting for official policy from the Indian government after sending recommendations to not to grant COVID-19 duty on polymer imports while providing a ban for import plastic products from China, as stated to SSESSMENTS.COM.
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