WeeklySSESSMENTS: India PE Prices W/C January 27

Author: SSESSMENTS


Turnaround In Demand Trend Does Not Affect Outlook For PE Prices In India



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  • Local offers across all PE grades remain stable over the week

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  • Demand is weakening as buyers prefer to wait on the sidelines

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  • Outlook for local PE prices remains positive despite the current demand situation


The turnaround in demand trend is expected to not affect the outlook for PE prices, market sources in India told to SSESSMENTS.COM. Last week, Indian market participants expected the healthy demand will sustain. However, in the week commencing January 27, the demand for PE is weakening, but players believe that it would not change the possibility of the upward price adjustment in the days to come. Compared to last week, local offers for all grades of PE reported stable. While in the import market, offers remain scarce. No fresh offers for import cargoes reported to SSESSMENTS.COM this week.


Demand is weakening on the back of several factors. The liquidity issues, the slow down in the global economy, the downtrend in crude oil prices, and the Coronavirus outbreak in China has pushed buyers to wait on the sidelines. On the supply front, SSESSMENTS.COM was informed that supply for all grades of PE is limited, especially for HDPE grades stemming from the previous maintenance shutdown at India’s HALDIA. Additionally, market talks have it that India’s GAIL Pata-1 is currently being shut, hence, supply from the company is also tight. While in the import market, shipment for cargoes from Iranian producers is delayed due to the less availability and the rough cold weather.


Despite demand has been slowing down, Indian market players believe that offers for PE still have room to increase by INR2,000/ton ($28/ton) at the minimum as supported by the tight supply and the expected increases in custom duty. Likewise, after the new budget announced on February 1, demand is expected to increase, as stated to SSESSMENTS.COM.




 

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January 30, 2020 1:30 PM