- Local, import offers were limited during April
- PP market was quiet due to nationwide Coronavirus lockdown
- PP market outlook remains bleak despite some relaxations on restriction during lockdown
At the beginning of April, the leading Indian petrochemical producer decided to reduce the offers for PP Homopolymers and PP Random Copolymer by INR3,000/ton ($40/ton) and by INR2,000/ton ($26.5/ton) respectively with effect from April 1 and withdrew the price protection. Overall, offers recorded both in the local and import markets were limited during April as most players were uninterested in checking the price movement due to nationwide Coronavirus lockdown. Market sources stated to SSESSMENTS.COM that although there were activities in the market, it was very small and only for selected buyers. On April 22, sources added that India’s Mangalore Refinery and Petrochemicals Limited opened a tender for 5,000 tons of PP Homo Raffia and 3,000 tons of PP Homo Injection for the second half of May shipment with South Asia market as the main target considering tight supply in the region. On the week commencing April 27, market activities remained limited as the country is still under lockdown. However, May shipment offers for PP cargoes across all grades from a Saudi producer were available between $880-1,010/ton on LC at sight, CFR Nhava Sheva Port.
Initially, the Indian government announced 21 days nationwide lockdown from March 25 until April 14. However, as the number of confirmed Coronavirus cases in the country continued to rise, the government decided to extend the lockdown until May 3. As such, the market was generally quiet during April, SSESSMENTS.COM noted. Although market players reported a slight improvement in the final week of the month, most buyers were still on a wait-and-see stance following the plunge in crude oil prices, weaker China market as well as feedstock prices. Moreover, the government has decided to extend the lockdown until May 17 following the highest single-day death toll recorded on April 28. Pertaining to COVID-19 tax, the All India Plastic Manufacturers’ Association (AIPMA) had convinced the Department of Chemicals & Petrochemicals to oppose the proposal of a 15% extra duty on import petrochemical products.
On the production sector, a source with the knowledge of the matter informed SSESSMENTS.COM that Haldia Petrochemical has resumed production at the company's PP plant with a capacity of 341,000 tons/year on April 18, 2020. Additionally, ONGC Petro Additions Limited (OPaL) resumed production at its 340,000 tons/year PP plant located in Dahej, Gujarat, India around mid-April. Considering poor demand in the domestic market, sources from Haldia and OPaL revealed plans to focus on selling to the export market, particularly to China. Meanwhile, other local producers, such as GAIL Ltd, Indian Oil Corporation Limited (IOCL), and Mangalore Refinery and Petrochemicals Limited (MRPL) have also reportedly resumed operation in late April.
Looking into May, market players opined that the outlook for PP pricing and demand in India will remain bearish although the government has relaxed some restrictions amid the extended lockdown. Sources contacted by SSESSMENTS.COM commented that most market players, particularly buyers will likely prefer the sideline positions while some will stay in their hometowns as their companies are in the red zone area.
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