Heavy imports lead to cut in polyethylene prices

Petrochemical manufacturers have cut the price of one grade of linear low density polyethylene ( LLDPE) by Rs2.50 to Rs3, following heavy imports last month and a decline in prices globally.

Reliance Industries, Indian Oil Corporation and Haldia Petrochemicals have cut the price by Rs3 a kg and GAIL by Rs2.50 per kg.

“In all other categories of polyethylene and polypropylene, the prices of last fortnight have been rolled over,” said official sources.

China, one of the largest producers of LLDPE, slashed the price by $55 per tonne last week and there have been heavy imports, too. LLDPE is one of the most popular variants of polyethylene, produced under low temperatures and used for plastic bags and sheets, plastic wraps, stretch wraps, pouches, toys, covers, lids, pipes, buckets, containers and the covering of cables.

The Indian market, sources said, is actually facing a shortage of polyethylene and that has been the reason for imports, unlike polypropylene, where supply is good. In fact, the government last week imposed an anti-dumping duty for the next five years.

Polypropylene is one of the most common polymer petrochemicals, used in a variety of day-to-day products from high-tenacity cement and fertiliser bags to tough fibres such as films and containers.

Compared to the October-early November festive season, production has picked up. So much so, say sources, that prices of polymers almost across the board in polyethylene and polypropylene had risen since by Rs1,000 per tonne. These prices were rolled over last week.

LLDPE is the only grade of polyethylene traded on the NCDEX, the National Commodities Exchange. Spot prices have fallen from Rs67 per kg at the beginning of the month to Rs65.30 per kg now. A similar fall has happened in polyvinyl chloride (PVC), while the price of polypropylene has gone up from Rs71.60 per kg to Rs73.45 per kg.

In October, Indian manufacturers had reduced prices following growing imports and low demand in the domestic market, contrary to the rising petrochemical prices globally.

Sources said domestic petrochemical marketers usually raise prices or keep these unchanged when demand is low in India and when global prices change. Prior to October, the prices were reduced in May.