Curtailed domestic supply, less import arrivals tighten LLDPE stocks in Indian markets – 5 Jun 2014

LLDPE stocks in polymer markets in India have shrinked significantly as domestic producers have been releasing supplies of the polymer in small quantities, resulting in traders being unable to cater to the prevailing active demand. Remarkably, LLDPE supplies of GAIL are also in less quantities, after resumption of its plant operations, that was shut-down temporarily for maintenance. Some traders revealed to the website that they were unable to replenish their exhausted stocks of the polymer (of GAIL) due to non-receipt of supply from the producer. Moreover, non arrival of adequate imports of the polymer to the country is also compounding to the tight-stock situation. In this regard, some market participants told the website that most importers restricted from booking fresh imports as their profit margins were affected in the recent past by the appreciating INR. They, thus, have been waiting for some stabilization in the strengthening Indian currency. 
 

A Delhi-based trader told the website, in the context of the prevailing market conditions in respect to the polymer, "Demand for the LLDPE material is strong, but supplies from all the domestic producers are less." Another trader in the market, who deals in GAIL products, told, " My LLDPE stocks have exhausted, and I have not yet received any fresh supply of the material from GAIL."
 

In the Mumbai market today, a trader described the prevailing market situation for the polymer as," Stocks of LLDPE have dwindled considerably, while, the demand is moderately strong. Producers not releasing fresh supplies of the material in adequate quantities have created the tight stock situation for the polymer."
 

But, will the tight supply situation lead to price of the polymer to go up in the coming days? In this regard, many market participants expect that the price movement will depend on changes in the customs exchange rate.
 

Readers can access the prevailing LLDPE prices in various markets in the country in the "Domestic Prices" section of the website.