Even as the crude oil prices are rising, it has not been reflected in the prices of polymers that are derivative products of crude oil. The polymer makers are facing a demand slump resulting in lower prices. In the December quarter, most of the refineries globally had drastically cut production as there was a sudden drop in demand for petrochemicals and polymers due to the slowdown.
Polymers are raw materials for producing plastics of various grades. Most plastic processors in the country are facing demand crunch leading to lower offtake of polymers such as polypropylene (PP), polyvinylchloride (PVC), polyethylene (PE) of high and low density grades.
In fact, the price of polypropylene has come down sharply in last two months, from Rs 62.65 at January-end to Rs 52.60 yesterday. The domestic manufacturers have also made complaints against its dumping in the country. The government has recently initiated an anti-dumping investigation against suppliers from Saudi Arabia, Oman and Singapore in response to an application filed by Reliance and Haldia Petrochemicals, the country's other polypropylene producer.
Even as the government is investigating the dumping charges, the domestic plastic processors, the other stakeholders, are resisting the move to impose anti-dumping duty saying that such a measure will harm the interest of processors. Last week, all leading associations of plastic processors in the country met in Mumbai and decided to resist the move to impose anti-dumping duty on polypropylene.
Situation in other polymers is no better. Polystyrene, which is an alternative material for polypropylene, has become costlier by nearly 10 per cent in the last three months. Prices of PVC are almost stagnant. An industry source said, "most refineries globally have cut production to avoid a glut due to recession fears in October. They have still not reverted to earlier production levels and supply in the market is reduced."
