Indian PE prices supported by strong packaging demand

Indian polyethylene (PE) prices have risen by $45-80/t or around 5-9pc in the past week, supported by strong demand for food packaging material.

High-density PE (HDPE) film prices rose by $80/t to $950-970/t cfr India, while low-density PE (LDPE) linear film prices have increased by $45/t to $930-950/t cfr India.

Packaging is a key downstream sector for PE. Covid-19 lockdowns in India have supported demand for food packaging, as more people order food for home delivery.

This has supported PE demand for packaging and has pushed converters to include a wide range of packaging options. Essential goods manufacturers in India have also added smaller packaging sizes to their product lines to increase accessibility for low-income customers.

The rising consumption has helped balance demand with supply in India.

Prices for imported polypropylene (PP) have also edged up, despite weakness in the domestic market.

Prices have risen by $20/t in the past week to $900-$920/t on a cfr India basis, as spot offers remain limited. The increase in PP raffia prices has been comparatively smaller than for HDPE and LDPE prices, given the drop in demand for PP raffia in India.

A fall in automobile sales and high leftover inventories for downstream PP converters has pushed down overall PP demand.

Indian producers are under pressure to clear stocks, sending listed prices lower in the domestic market. And PP exports have jumped by 60pc this year compared with recent levels because of higher supply availability.

By Matthew Rajendra