Polymer Market Update: Oversupply Pushes Prices Down Amid Weak Demand

PVC

LLDPE

PPCP

20 Dec 20242 Min ReadDaily Market Report

India's polymer market is facing oversupply due to increased domestic production, with major players like RIL ramping up capacities. Coupled with stable or declining demand and supply chain uncertainties, prices of key polymers have dropped. Globally, stable ethylene prices and economic changes, such as Mexico's interest rate cut, continue to influence the market.

Key Highlights:

Price Trends: Polymer prices are declining due to oversupply, with rates like ₹73,250/MT for DAGU S PVC K67 and ₹1,35,000/MT for Taita ABS (Ahmedabad).
Supply Surge: Companies like RIL's ramp-up of domestic production has led to an oversupply, outpacing stable or declining demand.
Global Impact: Stable ethylene prices and China's declining polymer futures highlight global market pressures.
Expert Insight: Oversupply, weak demand, and cautious purchasing drive market volatility, urging buyers to act strategically.

Polymer Prices: Key Market Rates and Trends

DAGU S PVC K67 ready material in Mundra: ₹73,250/MT
HMEL HDPE PE100 natural in Ahmedabad: ₹82,560/MT
EXXON PPHP Raffia in Mundra: ₹87,000/MT
HMEL LLDPE 1 MFI slip in Ahmedabad: ₹85,370/MT
Reliance PET 81-84 in Bhiwandi: ₹91,000/MT
Basell LDPE 4 MFI slip GP in Mundra: ₹1,05,000/MT
Natural Taita ABS in Ahmedabad: ₹1,35,000/MT
Shandong Gaoxin CPVC K57 in Mundra: ₹1,36,000/MT
Basell PPCP Random in Bhiwandi: ₹87,500/MT
HMEL MDPE BM in Ahmedabad: ₹86,300/MT

Polymer Supply and Demand Dynamics

India has significantly ramped up its domestic production of polymers, resulting in an oversupply in the market.
Companies such as Reliance Industries Limited (RIL) have expanded their production capacities, increasing the availability of key polymers like HDPE, LDPE, and PVC.
This surplus in supply, combined with stable or declining demand, has led to a natural decrease in prices.
Furthermore, disruptions in the supply chain have affected the consistent flow of both raw materials and finished goods. The polymer products supply chain in India has not been immune to these challenges.
Delays and uncertainties within the supply chain have caused manufacturers to exercise caution, resulting in a reduction in their polymer purchase volumes.

Global News and Developments Impacting Polymers Market

PetroChina Jilin Petrochemical (Jieyang) has restarted its Acrylonitrile (ACN) Plant after maintenance work. The Plant is located in Jieyang, Guangdong, China.
Sanfame Group has started up a new Polyethylene terephthalate (PET) Line on 19th December, 2024. The Line is located in Jiangyin, China.
Mexico's Central bank cut Interest rates by 25 basis points (bps) to 10.0% and hinted at steeper cuts ahead.
Ethylene Prices assessed stable at US$ 880/- per MT CFR NE Asia and US$ 930/- per MT CFR SE Asia basis.
Customs announces new Exchange Rate for Import valuation at Rs. 85.95/US$ (+0.30) and Rs. 84.25/US$ (+0.35) for Export Valuation w.e.f. 20th December, 2024.
Sichuan Vinylon has shut down its Methanol Plants for maintenance work. The Plants are located in Chongqing, China.
Today January Future Prices of PP traded lower by 46 RMB at 7362, LLDPE by 16 RMB at 8429 and PVC by 7 RMB at 4986.

Expert Opinion: Navigating a Volatile Market

The decline in market demand for polymer products in India and the resulting price drop are outcomes of a complex interplay of economic conditions, supply chain dynamics, domestic production increases, crude oil price fluctuations, government policies, and environmental considerations.