Demand Conditions Expected To Support Local PE Prices In India, Logistic Issue Persists
- Domestic PE offers continue to shift
- PE demand in India remains healthy, supported by the packaging sector
- Local PE prices will be stable at the current level
Indian market players expected demand conditions to support local PE prices. On the week commencing June 15, SSESSMENTS.COM noted that local and localized PE offers in India captured stable to slightly increase. Local traders increased PE offers across all grades by INR1,000-2,000/ton ($13-26/ton) compared to offers earlier last week. Further explained, even though the leading Indian petrochemical producer adjusted up HDPE Film and HDPE Blow Moulding offers by INR2,000/ton ($26/ton) last week, a local trader prefers to increase the offers by INR1,000/ton ($13/ton) only as buyers’ responses towards the producer’s offers were negative. While another trader decided to maintain stable offers for local and localized Middle Eastern PE cargoes as the company had increased local PE offers at the end of last week.
In the import market, fresh PE offers remain scarce since last week as most players are still waiting for July shipment offers from Middle Eastern suppliers. However, traders believe that offers for HDPE Film will be around $830-850/ton on CIF basis. While for LDPE Film, the offers should be close to $900/ton-level. From the traders’ end, import Saudi HDPE Film and Qatari LDPE Film remain unchanged from last week. SSESSMENTS.COM’s pricing database showed that deals for Qatari LDPE Film concluded at the same level to the initial offer at $895/ton on LC at sight, CIF Nhava Sheva Port.
The overall PE demand in India remains healthy over the week and mostly supported by the packaging sector. Most converters are currently running at 40-60% from normal production rates, while for converters who produce essential products, the production rates might be higher. However, a local trader mentioned that PE demand from the company’s end is slower than last week as buyers have replenished stock since last week in anticipation of higher prices. The logistic sector is still not normal yet as the Coronavirus cases in the country continue to soar. On the supply front, PE supply at the local producers’ end is rather tight as the effect of the lockdown, SSESSMENTS.COM was told.
Majority of Indian market players believe that local PE prices will be stable at the current level. While demand is expected to remain healthy as buyers will continue to make purchases even though in small volume since the operating rates will gradually increase, as stated to SSESSMENTS.COM.
