Indian polymers struggle with lockdown impact

Indian polymer demand is reeling from transport restrictions as a result of the country's 21-day coronavirus-related lockdown, with converters shutting operations and spot trade grinding to a halt.

At least 85pc of Indian downstream conversion plants remain shut, resulting in a sharp drop in demand for polyethylene (PE) and polypropylene (PP) resins.

Local authorities are allowing deliveries of raw materials to produce essential goods. But truck deliveries of polymers to plastic factories remains a challenge across the country because of the transport restrictions.

Domestic polymer producers are also expected to further cut operating rates or shut their plants as inventories continue to rise. Trading firms and distributors said they expect to return to operations closer to 14 April, the last day of the lockdown.

Excess stocks and difficulty in opening letters of credit because of bank closures has curbed buying interest for polymers in the short term. The rupee remains depreciated, at 75.9 against the US dollar today, dampening any buying interest for imports for shipments after the lockdown period.

Linear low-density polyethylene film prices in India yesterday were at $720-770/t cfr, down by $65/t from the previous week. PP raffia prices were at $780-830/t cfr, lower by $95/t than last week, according to Argus data.

By Muhamad Fadhil and Yee Ying Ang