While we are not directly impacted by crude prices or naptha prices, but rising prices of imports especially from West Asia and Asia is basically providing ample scope for the domestic manufacturers to increase prices.
Domestic manufacturers have been holding on to price revisions for a long time to cope up with cheap imports. In fact, now the prices of imports currently are so high that even after increasing prices for the third time since January1, 2011, polymer prices are Rs 6-7 cheaper per kg in the domestic market, said company officials.
The major petrochemical manufacturers – Indian Oil corporation, Haldia petrochemicals, Gas Authority of India Ltd and Reliance Industries have increased prices of polypropylene by Rs 3 per kg and Rs 1.50 per kg for polyethylene this week.
Company officials also added that the recent spurt in polymer prices is triggering advanced sales order for the commodity. “We are receiving more letters of intent and enquiries for purchases by plastic users who may be expecting prices to go up. Moreover, costlier imports is another reason for the forward purchases. Earlier, low cost of imports used to be great cushion for the domestic polymer users who were not much bothered by the domestic prices since domestic prices used to rule expensive compared to imports by Rs 1-2 a kg at any given point of time, explained the official.
Now the situation has reversed since players in West Asia and Asia are incorporating high crude and naptha ( feedstock for polymer) into market prices of polymers. However the trigger for more purchases are especially for polypropylene and high density polyethylene. Linear low density polyethylene, used mostly for plastic bags and pouches demand is not picking up following the stringent environmental norms for usage of plastic bags in February 2011.
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.
Polypropylene is used in a variety of day-to-day products, from high-tenacity cement and fertiliser bags to tough fibres such as films and containers. HDPE is a high-tenacity polymer, used primarily in preparation of bottles, chairs, mugs, wood plastic composites, telecom ducts. PVC is used for construction and pipes.
In the domestic market, while polypropylene prices are hovering in the range of 95.50 per kg as against RS 92 per kg a week before . HDPE price is hovering around Rs 87.25 per kg ( 85.75 per kg ) and LLDPE prices is at Rs 83.75 per kg ( Rs 82.50 per kg).2 as against 85.75 per kg a week before. PVC prices are up at RS 67.25 per kg ( Rs 64.75 per kg ).