In the month of February, overall demand for PET resins has been sluggish in the country. In Asia, the prices for PET has declined in due to a surge in MEG prices, addition of new manufacturing capacity, large stock inventory and weak demand conditions. In line with this international trend, Reliance Industries decreased its list price last week by Rs. 2 per kg. Indianpetrochem spoke to some trades and end-user customers across the country in order to access the implication of these events on the demand situation.
Recent news story from an international publication indicate that huge inventory pile-up and weak demand (post the Lunar New Year) for MEG has pushed down spot prices for the petrochemical to all time lows in the last week of February in Asia, specifically China ( Read news clips: PET price in India not to be impacted by feedstock price pressure).
As a consequence of this, the upstream cost for PET resins from Asian manufacturers has declined. This coupled with weak demand and huge inventory built-up for PET has put downward cost pressures for PET prices in Asia.
As a result of this, the price of imported PET has declined in Indian market. This invariably has impacted the Indian market, which seems to indicate the reason for a decline in the list price for PET by Reliance last week.
The website spoke to a trader in Mumbai who confirmed moderate demand for the engineering plastic in the Mumbai market. He went on to add that there were good supplies of PET manufactured by Reliance in the market, as a consequence of which the open market prices for PET (Reliance) dropped by Rs. 1- 2 per kg this week and settled at current trading levels of Rs. 120- 124 per kg.
Similar market sentiment was noted in Ahmedabad, whereby a trader confirmed moderate demand conditions in the market. As such a downward price revision was noted for PET resins due to which the price dropped by Rs. 1.5 per kg to current trading level of Rs 119. 5 per kg this week.
The website spoke to prominent player in the bottle manufacturing industry and understood that this price decline is going to have marginal impact on the demand for PET resins in India, as the demand for resins is usually low at this time of the year. The demand is expected to gain momentum at the end of next month, during summer season, he added.
The official went on to say that the price differential for PET resins between imported and domestic (RIL) was significant, imports were much cheaper. However, given the immediate availability of RIL manufactured products in the market, smaller players preferred domestic products over imports.
There is a general expectation in the market that the resin prices will gain momentum during summer season, when the demand from bottle manufacturing industry is the most.
By Ntasha Berry
ntasha.berry@indianpetro.com
Recent news story from an international publication indicate that huge inventory pile-up and weak demand (post the Lunar New Year) for MEG has pushed down spot prices for the petrochemical to all time lows in the last week of February in Asia, specifically China ( Read news clips: PET price in India not to be impacted by feedstock price pressure).
As a consequence of this, the upstream cost for PET resins from Asian manufacturers has declined. This coupled with weak demand and huge inventory built-up for PET has put downward cost pressures for PET prices in Asia.
As a result of this, the price of imported PET has declined in Indian market. This invariably has impacted the Indian market, which seems to indicate the reason for a decline in the list price for PET by Reliance last week.
The website spoke to a trader in Mumbai who confirmed moderate demand for the engineering plastic in the Mumbai market. He went on to add that there were good supplies of PET manufactured by Reliance in the market, as a consequence of which the open market prices for PET (Reliance) dropped by Rs. 1- 2 per kg this week and settled at current trading levels of Rs. 120- 124 per kg.
Similar market sentiment was noted in Ahmedabad, whereby a trader confirmed moderate demand conditions in the market. As such a downward price revision was noted for PET resins due to which the price dropped by Rs. 1.5 per kg to current trading level of Rs 119. 5 per kg this week.
The website spoke to prominent player in the bottle manufacturing industry and understood that this price decline is going to have marginal impact on the demand for PET resins in India, as the demand for resins is usually low at this time of the year. The demand is expected to gain momentum at the end of next month, during summer season, he added.
The official went on to say that the price differential for PET resins between imported and domestic (RIL) was significant, imports were much cheaper. However, given the immediate availability of RIL manufactured products in the market, smaller players preferred domestic products over imports.
There is a general expectation in the market that the resin prices will gain momentum during summer season, when the demand from bottle manufacturing industry is the most.
By Ntasha Berry
ntasha.berry@indianpetro.com
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