News
08/06/26
Indian PE importers wary of duty deadline, forex
Mumbai, 8 June (Argus) — India's polyethylene (PE) importers have turned
cautious about booking new imports due to uncertainty over the fate of a
temporary import duty waiver and volatility in the rupee. The south Asian
country relies heavily on imports to satisfy domestic demand for several
petrochemical products, including polymers. Supply chain disruptions caused by
the Middle East conflict have led to a surge in petrochemical prices. New Delhi
waived off import duties on 40 petrochemical products from April, including PE,
polypropylene (PP), and polyvinyl chloride (PVC), to ensure that the supplies to
end-users remained stable. The temporary relief is expected to expire on 30
June. India had imposed a 7.5pc duty on PE, PP, PVC imports. "People are not
keen on booking imports due to uncertainty on whether the import duty will be
extended or not," a key market participant said. The cut in import duties, as
well as improved supplies, led to a moderation in PE prices. Argus -assessed
linear-low density polyethylene prices at $1,250-1,330/t cfr India for the week
to 5 June, compared with $1,430-1,500/t cfr India on 10 April. Low density
polyethylene prices were assessed at $1,500-1,600/t cfr India for the week ended
on 5 June, down from $1,700-1,800/t cfr India on 10 April. Volatility in the
Indian rupee is also weighing on buying sentiment. The US dollar/rupee exchange
rate stood at 95.38 on 29 May, moved to 94.89 on 1 June, and rose again to 95.40
on 5 June, according to Reserve Bank of India data. The rupee remains sensitive
to oil price movements, which have been volatile due to uncertainty over US-Iran
ceasefire talks. Domestic PE production has remained stable, with state-owned
Gail partially restarting operations at its Pata petrochemical complex in May.
Converters have also reduced operating rates because of high prices and labour
shortages, leaving domestic supply broadly sufficient to meet near-term demand,
according to market participants. PP booking stable PP import demand has been
stronger compared to PE over the past few weeks, due to tightness in domestic
material availability. While New Delhi issued an order in March to divert
propane, butane and propylene in March, several market participants said
feedstock diversion has since increased in the past few weeks. A key domestic
producer has also cut operating rates, a source familiar with the matter told
Argus , which has further tightened the market. Around 80pc of India's PP
capacity has been affected by government curbs on feedstock. Domestic producers
have raised prices by Rs6/kg so far in June, with further increases expected by
some market participants. Some southeast Asian producers in Thailand and Vietnam
offered competitive prices last week, encouraging buyers to import material on
tight domestic supply. Argus -assessed PP raffia prices in India at
$1,250–1,310/t cfr India on 5 June, down from $1,350-1,430/t cfr India on 10
April. By Sourasis Bose Send comments and request more information at
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