Global Decline Forces Ipcl To Roll Back Polymer Tab

Indian Petrochemicals Corpor-ation Ltd (IPCL) has rolled back polymer prices between 1 to 5 per cent in the face of slack consumer demand and falling international values.

On an average, IPCL has lowered polymer prices by 4 per cent. The petrochem major has lowered the tag to compete with the landed cost of imported resins.

Internationally, polymer prices have been on the decline since the first quarter of 1997-98.

"The slide at the local level reflects the decline in the international petrochemical prices," industry sources said.

The decline in polymer prices is expected to affect Indian Petrochemicals Corpor-ation Ltd's performance during the first half of 1997-98.

"As the prices are sluggish, the only way out for IPCL to increase its bottomline is through its volumes," according to a Mumbai-based analyst.

Besides Indian Petroch-emicals Corpor-ation Ltd, Reliance Industries is also reportedly giving discounts to bulk buyers. "The pressure on marketing PP is heavy as the company's inventory has shot up," they add.

Indian Petrochemicals Corporation Ltd has lowered price of linear low density polyethylene by 2,905 per tonne. In July 1997, the linear low density polyethylene tag stood at Rs 51,625 a tonne as against Rs 54,530 in the previous year.

Similarly, high density polyethylene (HDPE) decreased to Rs 53,125 a tonne from Rs 53,660 per tonne in July 1996. Poly vinyl chloride (PVC) is now priced at Rs 44,500 per tonne compared with Rs 46,250 per tonne last year.

"There has been a sharp fall in the prices of polypropylene. Indian Petrochemicals Corpor-ation Ltd has decreased PP prices by over 12 per cent," according to industry sources.

IPCL's polypropylene is priced at Rs 48,500 a tonne compared with Rs 55,120 per tonne in July 1996. "The lack of aggressive Chinese buyers has put pressure on the polymer prices," said another analyst here.

China is the largest polymer market with a per capita consumption of 12 kg.

In the first quarter of 1997-98, sector prices in the international market dropped in the range of 7 to 10 per cent.

Low density polyethylene declined from $910 in April 1997 to $850 in July 1997; linear low density polyethylene from $895 to $815 per tonne; and, high density polyethylene from $895 to $825 per tonne.

As against PVC, polypropylene prices internationally fell sharply by 15 per cent.

In the overseas market, polypropylene attracts a price of $680 a tonne ($800 a tonne in April 1997).