The Indian government has decided to extend the nationwide lockdown to contain the coronavirus pandemic for another two weeks effective on May 4. However, it also outlined some new guidelines, allowing some businesses outside containment zones to reopen. Market participants expect petrochemical demand and prices to increase in line with the business resumption.
Market sources informed SSESSMENTS.COM that ex-tank methanol prices were down at INR20/kg (26 cents/kg) at Mumbai and INR18/kg (24 cents/kg) at Kandla, compared to INR22-23/kg in March. Meanwhile, Asian acrylonitrile rebounded by $60/ton to $880/ton CFR South Asia last Tuesday.
Plant restarts, however, are expected to slow down following the deadly gas leak at a plant owned by LG Polymers India. Market sources said the incidents would likely slow down India’s demand for import styrene. LGPI imported on average about 10,000 tons of styrene every month. Previously, SSESSMENTS.COM also reported that India’s National Disaster Management Authority imposed safety rules for manufacturing industries restarting nationwide amid the ease of coronavirus lockdown in the country.
Market players informed SSESSMENTS.COM that Haldia Petrochemicals Ltd. restarted its steam cracker in late April and is now operating the unit normally. The cracker was taken offline on March 24 following weak demand amid the country’s national lockdown. Haldia’s cracker can produce up to 670,000 tons/year of ethylene, 425,000 tons/year of propylene, and 97,000 tons/year of butadiene. The output is fed to the company’s 340,000 tons/year PP unit, 550,000 tons/year HDPE unit, and a 150,000 tons/year HDPE/LLDPE swing plant.
PE demand diminished during the nationwide lockdown, but market players now expect demand to recover amid the relaxed restrictions. Earlier during the lockdown, India exported PVC as domestic demand weakened. However, this rare trade flow is expected to stop and India will resume PVC imports from Asian suppliers after the lockdown easing.
