- Import PP offers to India offers were scarce during June
- Improvement in PP demand observed after the government lifted its lockdown measures
- July shipment offers from foreign suppliers expected to be firm
In the first week of June, following the rising of feedstock and crude oil prices, the leading Indian petrochemical producer initiated a price increase of INR3,000/ton ($40/ton) for PP Homo Raffia and PP Homo Injection grades as compared to the previous price list with effect from June 1, 2020. Similarly, another producer increased local PP Homo Raffia prices by INR3,200/ton ($42/ton). While on June 11, the leading Indian petrochemical producer applied another price increment of INR2,500/ton ($33/ton) for local PP Homo Injection, PP Random Copolymer, and PP Impact Copolymer grades. As for local PP Homo Raffia grade, the offers increased by INR2,000/ton ($26/ton). On the week commencing June 15, SSESSMENTS.COM noted that local PP offers across all grades in India increased by INR1,000/ton ($13/ton) on a weekly comparison and remained stable until the end of June.
In the import market, import PP offers were scarce during June. Most traders did not have import PP offers as local cargoes were available at a lower level. Moreover, July shipment offers from foreign suppliers to India market have yet to come out. However, on the week commencing June 22, SSESSMENTS.COM’s pricing database showed that a global trading house was offering July shipment Middle Eastern PP Homo Raffia to India at $70/ton higher compared to June shipment. These offers were deemed unworkable as local PP Homo Raffia offers were more attractive.
Improvement in PP demand in India observed after the government lifted its lockdown in a phase-wise manner by allowing more businesses and educational institutions to resume activities from June 8. Moreover, the attractive prices in the local market had lifted buying sentiment in India market. Some local producers even moved back their export allocation to the domestic market following the improvement of PP demand. PP demand remained healthy until the end of June, especially from the food and packaging sectors. However, on the week commencing June 22, demand for PP Injection and PP Copolymer grades was slow in line with sluggish demand from the automotive sector and houseware products due to the Coronavirus pandemic. On the supply side, SSESSMENTS.COM was told that most of the Indian PP producers were having low inventory levels in the second week of June.
In the production sector, SSESSMENTS.COM noted that ONGC Petro additions Limited (OPaL) had run production at its 340,000 tons/year PP plant at maximum capacity since the end of May on the back of improvement in demand. While Indian Oil Corporation Ltd (IOCL) had selected LyondellBasell’s Sheriphol technology for a new polypropylene (PP) plant which will be built in Panipat, Haryana State, India with a capacity of 450,000 tons/year.
For the outlook, market players opined that even though the reimposed lockdown in several areas in India would not affect industries significantly, the situation will depress market sentiment in the country. In terms of pricing, July shipment offers from foreign suppliers will be firm, however, if the new import PP Homo Raffia offers are more than $900/ton-level, the offers would not be able to compete with local prices, as stated to SSESSMENTS.COM.
