- Domestic PE offers generally moving in the same direction throughout June
- Demand was considered healthy
- Local and import PE prices will most likely remain firm
On the week commencing June 1, the leading Indian petrochemical producer adjusted local offers for HDPE and LDPE grades by INR1,000/ton ($13/ton) higher with effect from June 1, except for HDPE Pipes, HM Pipe, LDPE HD, and LDPE Injection Moulding, the offers were kept stable. While for LLDPE grades, the offers increased by INR2,000/ton ($26.5/ton). However, a local manufacturer revealed that the actual offers from the producer only increased around INR1,500/ton ($20/ton) after the discounts. Sources added that a trader was keeping the offers for local PE cargoes stable, citing healthy demand from the company’s end. Moving to the week ending June 12, the leading Indian petrochemical producer increased the offers for HDPE Blow Moulding by INR2,000/ton ($26.5/ton) and by INR1,000/ton ($13/ton) from HDPE Film, LDPE Film, and LLDPE Film C4. Previously on June 10, sources informed that another local producer also raised local offers for LLDPE Film C4 between INR1,000-2,000/ton ($13-26.5/ton) on a weekly comparison. As explained to SSESSMENTS.COM, the upward adjustments made by the local producers were mainly supported by the healthy demand amid limited supply.
Entering the third week of June, some local traders increased PE offers across all grades between INR1,000-2,000/ton ($13-26.5/ton) compared to the offers announced a week earlier. Although the leading Indian petrochemical producer adjusted HDPE Film and HDPE Blow Moulding offers by INR2,000/ton ($26.5/ton) in the previous week, SSESSMENTS.COM was informed that a local trader decided to increase the offers for the same grades by only INR1,000/ton ($13/ton) considering the negative response received by the producer. In the final week of June, local and localized PE prices in India were kept stable on the weekly comparison.
From the import market, HDPE Film and LDPE Film offers from the leading Saudi polyolefins producer surged by $80/ton and $60/ton respectively on week-on-week comparison in the first week of June. While for LLDPE Film C4 from the same producer, the offers were available at $800/ton. However, the offers were deemed unworkable as the India market was still heavily affected by the Coronavirus pandemic. On the other hand, a manufacturer revealed that the company made procurement of 200 tons of Middle Eastern HDPE Film at $770/ton. On the week commencing June 8, there were no import offers recorded in the India market. By the following week, sources added to SSESSMENTS.COM that import PE offers remained scarce since most players were still waiting for July shipment offers from Middle Eastern suppliers. However, traders believed that the offers for HDPE Film and LDPE Film would be around $830-850/ton and $900/ton-level respectively. From the traders’ end, import Saudi HDPE Film and Qatari LDPE Film were kept stable on weekly comparison with deals for Qatari LDPE Film concluded at the initial offer level at $895/ton. In the final week of the month, July shipment offers for Saudi and Qatari LDPE Film surfaced with an upward adjustment of between $40-50/ton on the monthly comparison. All import offers on LC at sight, CIF India Main Port basis.
Although the Indian government has planned to extend the lockdown in high-risk areas or red zones until June 30 while allowing businesses to reopen with limited working hours. As more businesses reopened, buying sentiment in the India market improved and overall demand was considered satisfactory during June with food packaging sector as the main contributor. Sources added to SSESSMENTS.COM that the strongest demand was recorded for LLDPE Film C4 as all sectors were doing good, especially inner packaging. Additionally, robust demand for hand sanitizer bottles supported demand for HDPE Blow Moulding. Other than that, demand for HDPE Pipe also started to improve. However, manufacturers stated that finished product demand remained slow by the first week of June as the market was still heavily affected by the pandemic. As informed in the fourth week of the month, players preferred local materials over imports due to competitive offers while some buyers were halting procurement activities as they were waiting for more fresh import offers especially from Middle Eastern producers in order to gauge the market direction.
On the supply side, tightness was reported by the second and third week of June. In the second week, SSESSMENTS.COM was told that the availability for HDPE grades was the least among other PE grades since only the leading Indian petrochemical producer who had some quantities to offer to the market while other local producers reported having no stock. While in the third week, PE supply from the local producers was still rather tight amid lockdown. By the third week of June, the process of materials delivery was not normal yet since the Coronavirus cases in the country remained high.
Entering July, the majority of Indian market players predict that the possibility for local and import PE offers to decrease is limited. Although the monsoon season has started to take over some parts of India, sources opined to SSESSMENTS.COM that the firm feedstock prices would lend support. While for the demand, it is predicted to slow down due to the monsoon.
