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Import prices of Polypropylene and Polyethylene in India have risen from previous month’s levels as tightness in supplies, which has resulted in oversold positions, has prevailed over buyer resistance. Indian traders expect the bullishness to continue in the near term, riding on the easing of COVID curbs in China and the infrastructure sops expected in the Indian budget ahead.

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Traders said polyolefin supplies to most Asian import markets have tightened and this was affecting availability to India as well. There is discernible tightness in import supplies of PP and PE in the Indian markets, and this is, of course, a reflection of the shortness that’s being felt across the Asian markets. They are seeing considerable number of producers noting oversold positions.

The termination of COVID limits has strengthened Chinese demand, which will inevitably result in a reduction in supplies to Asian markets and is already exerting pressure on Middle Eastern supplies. For Indian import values, that would be positively net. The Indian budget, which is scheduled to be announced in February and is anticipated to include increased funding for rural infrastructure projects, which would also be advantageous for plastics.

Prices for all Polyolefins are Rising

In January, import PP prices in India, which had been down for five straight months, increased in step with increases in other Asian markets. Homopolymer PP raffia prices have increased from the USD 950–USD 1000/tonne CIF levels seen approximately a month ago to a reported range of USD 980–USD 1030/tonne CIF India. Prices remain roughly 23% below levels seen in July 2022.

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Regarding PE markets, import prices of HDPE film were recorded in the USD 1050–USD 1110/tonne CIF India range, as opposed to the USD 1040–USD 1100/tonne CIF levels from the previous month.

Prices for LDPE film, which were primarily around USD 1100 per tonne in the previous month, are now recorded at USD 1120 to USD 1150 per tonne, while LLDPE film is at USD 1060 to USD 1120 per tonne CIF, down from USD 1040 to USD 1100 per tonne previously.

Judicious Purchasing Tactics

But a second Indian merchant pointed out that purchasers haven't overreached to seize opportunities. They may have recognised a wise buying approach at this time. Market players don't want to be discovered holding inventory at unaffordable prices. However, they also don't want to pass up a rising trend if it occurs.

What lies ahead for the polyolen markets in the near future may be influenced by the COVID situation in China as well as the approaching national budget in India. Over the past month, they have noticed an overall increase in market sentiments.

Chinese Advances are a key Element

The strengthening of demand in China following the easing of the COVID limitations is a significant element now favouring Asian markets for PP and PE. The reopening of China is expected to increase demand for consumer products and commodities in China and its neighbours in Asia, as well as raise prices for polymers.

The increasing uptake is anticipated to diminish assuage import availability for Asian markets, especially India, as well as China's exportable surpluses.

2023 Union Budget will play important for PP, PE, and PVC

The next Union Budget 2023 is expected to place a strong emphasis on infrastructure and rural development, according to economists and analysts in India. Some projections indicate that funding for agricultural and rural expansion will increase by USD 10 billion, or 15%, over the previous fiscal year.

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This would entail increasing the amount of money spent on infrastructure for irrigation, housing, and rural roadways. This all suggests that PP, PE, and PVC will have a better year in the future.

As per Procurement Resource, India's import prices for PP and PE have increased from the previous month's levels as buyer resistance has given way to supply constraints that have led to oversold positions. Based on the loosening of COVID curbs in China and the anticipated infrastructure sops in the upcoming Indian budget, Indian traders anticipate the bullishness to last in the near future.