India PP Market Battling With Fear Of Second Wave Of Infections
- Skyrocketing import prices discouraged buyers from making fresh purchases
- Demand for certain PP grades remains healthy
- Outlook remains pessimistic
Market sources in India revealed to SSESSMENTS.COM that concern over the second wave of Coronavirus infections is underway sending jitters on the India PP market. In the domestic market, the leading Indian petrochemical producer has announced a fresh price list, with effect from July 1, 2020. As compared to the previous price list, the producer applied a price increase of INR2,000/ton ($26/ton) for PP Homo Raffia grades. From the import market, some suppliers mentioned that the companies temporarily halted offers of PP cargoes to India markets as converters are not actively seeking import cargoes, deeming current offers from suppliers too high to be workable. Considering the upcoming import PP offers are expected to hover above $900/ton-level, most buyers voiced out that the offers would be unfeasible as India’s domestic PP prices are available at a lower level.
After a rapid surge in new confirmed cases across India, several states have announced maximised restricted lockdown in some of their districts to curb the further spread of the highly contagious virus. The lockdown has been extended in containment zones until July 31, including Delhi, Maharashtra, Tamil Nadu, Jharkhand, and West Bengal. For areas outside of containment zones, the lockdown has been eased in a phased manner starting from June 1, despite experts warning that the country was far from hitting its peak. Demand-wise, market sources noted that demand for PP Homo Raffia and PP Homo Film in India remains healthy this week, while demand for other PP grades continue to limp along as concern over the second wave of coronavirus infections put a damper on end-products demand. Some sources pointed out that the recovery in end-products demand has yet to take hold, particularly for home appliances and automotive sectors as overall Indian consumption has not yet to show signs of a rebound. Despite an escalation in a recent border clash, no significant supply and delivery issues reported to SSESSMENTS.COM.
For the outlook, Indian market players voiced out to SSESSMENTS.COM that there would be room for PP prices to continue upward on the back of rising feedstocks prices, but gains are likely to be capped by lower demand growth amid rising fears that a second wave of the coronavirus may be on the horizon. Some sources expressed that the prolonged lockdown will push the market into a further slowdown and led to rising uncertainties. As such, demand is projected to remain on the negative side in the days to come.
