Major polypropylene producers in India have reduced their offer prices in the domestic market as of August 1 due to a poor demand outlook, industry sources said Tuesday.
Reliance Industries has cut its domestic PP offer level by Rupees 4,000/mt ($58/mt) as of August 1, sources close to the company said Tuesday.
Indian Oil Corporation, Haldia Petrochemicals and other major Indian PP producers have followed suit, according to industry sources.
After the Rupees 4,000/mt cut in prices, Reliance was offering PP raffia grade in the domestic market at Rupees 85,730/mt ex-plant, or about $1,195/mt on an import parity basis, sources said.
Its injection grade was being offered at Rupees 87,860/mt ex-plant and biaxially oriented polypropylene, or BOPP, grade at Rupees 89,600/mt, equivalent to about $1,233/mt and $1,259/mt, respectively, on an import parity basis.
The CFR South Asia PP raffia price, which is predominantly for product delivered to the Indian market, was last assessed at $1,150/mt on July 29, Platts data showed.
Ahead of the drop in PP prices, Indian producers had announced a price protection scheme for domestic clients over July 21-31, whereby producers agreed to refund the difference in purchase price if offers were lowered on August 1, according to industry sources.
This strategy was meant to attract buyers who would otherwise have held back, waiting for offers to fall.
The India PP demand outlook for the rest of the third quarter continues to be bearish due to the seasonal monsoon in India, declining Chinese demand and plentiful supplies from the Middle East, industry sources said.
