After two rounds of price increase in November, polymer manufacturers have cut prices of polypropylene this month by Rs 2 a kg to counter slackening demand in the domestic market.
“Both naphtha and crude oil prices are volatile and so are the international polymer prices. Therefore, anticipating prices would be unstable for some time, domestic buyers are deferring their purchases till the market stabilises,” said a source.
Prices of polyethylene continue to remain at Rs 80-85 a kg, while poly-propylene prices are Rs 87-89 a kg. Market sources add that price cuts are in line with the international scenario, where demand is weak due to upcoming holidays and New Year. “The demand is expected to pick up only after January,” said the source.
Polyethylene is used for a varied range of products, ranging from plastic bags and sheets to plastic wraps, stretch wraps, pouches and toys, etc. Polypropylene is used in a variety of day-to-day products, from high-tenacity cement and fertiliser bags to tough fibres such as films and containers.
On the other hand, while imports have completely stopped in the petrochemical sector, given the sharp rupee depreciation, domestic manufacturers have found a safe haven in exports. “Due to the depreciating rupee, exporters are fetching a good margin which more than compensates for the stickiness in demand in the domestic market,” said the source. Market sources said those importing have dollars from corresponding exports or have to import under obligation of the letter of credit (LC). Rolling over of LCs is also done with mutual understanding of importers and exporters.
In November, despite crude and naphtha prices ruling moderate to low, manufacturers had raised prices twice to fight the impact of a depreciating rupee.