Sources: Reimposed Lockdown Will Eventually Depress Sentiment In India PP Market
- Import PP offers to India remain scarce
- Overall PP demand is slow, except the demand for PP Homo Raffia
- Upcoming import PP offers from foreign suppliers will be firm
Indian market participants voiced out to SSESSMENTS.COM that the reimposed lockdown in several areas in the country will eventually depress sentiment in India PP market. On the week commencing June 22, local PP offers in India captured stable compared to last week. Offers for PP Homo Raffia and PP Homo Injection from a local producer remained unchanged from last week and stood at INR75,500/ton ($1,000/ton) on cash, EXW Ahmedabad basis and excluding 18% GST. Likewise, a local trader maintained stable PP offers on a weekly comparison. In the import market, fresh import PP offers remain scarce this week as suppliers have not announced new offers. Most market players opined that when the new prices come out, it would not be workable since PP cargoes in the local market are available at competitive levels. For this week, a global trading house is offering July shipment offers for Middle Eastern PP Homo Raffia to India between $940-950/ton on LC at sight, CIF Main Port basis, $70/ton higher compared to June shipment. However, the offers are deemed unworkable as local PP Homo Raffia offers are more attractive. While July shipment offers for PP Homo Raffia of South Africa origin at $900/ton are no longer valid, as such, buyers prefer to purchase from the local market.
As mentioned to SSESSMENTS.COM, demand for PP Homo Raffia in India remains healthy this week. While demand for other PP grades is slow in line with sluggish demand for the automotive sector and houseware products due to the Coronavirus pandemic. Moreover, most buyers only make procurements on a need basis. Additionally, as the Coronavirus cases continue to mount, the government decided to reimpose lockdown in several areas in India. However, traders stated that the lockdown is not affecting industries significantly as people are still coming back to work. On the production side, 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. On the supply front, no significant issue was reported.
For the outlook, Indian market players opined that the upcoming import PP offers from foreign suppliers will be firm. While for demand, players believe that even though the lockdown would not affect production, the situation will depress market sentiment in the country, as stated to SSESSMENTS.COM.
