Indian Producers Likely to Lower Ex-Work PE Prices Under Impact of Declining Ethylene Prices in Asian Markets – 29 Oct 2014

In what could be regarded as good news for Indian buyers, producers in the country are likely to reduce their ex-work PE prices in the upcoming price revisions, as indicated by the prevailing feedstock price movements and supply situation. Interestingly, domestic producers have already assured price protection over their PE materials, and they can be expected to succeed the price protections by lowering the prices in view of the conditions prevailing.

The primary factor for the expected consideration of possible price decrements is the remarkable declines in Ethylene prices in key Asian regions. Price of the feedstock has been declining in the Asian regions on account of falling Crude Oil prices and inactive demand conditions.

Indianpetrochem's price database shows that Ethylene price in the South East Asian region declined by $225 per metric tonne since the first week of this month. On October 28, 2014, the price in the South East Asian region was reported at $1,279 per metric tonne (cost, freight inclusive), and, the price was reported at a remarkably higher rate in the first week of the current month at $1,504 per metric tonne (cost, freight inclusive).

In Indian markets, stocks of PE materials are ample and demand has been moderate. Many buyers also have been learnt to have postponed their PE purchases, and were waiting for domestic producers to lower their ex-work PE prices.

In the prevailing situations of availability of ample PE stocks in the country's markets, and declining feedstock prices; producers are most likely to lower their ex-work PE prices in the coming days.