India's strong demand for low-pressure polyethylene pipe or material and hollow grade will continue to supply tension, the recent formation of support for import prices.
Indian polyethylene (PE) producers have cut pipeline output and hollow grade production to increase pipeline grade production, resulting in more lucrative profits.
Since September last year, tight supply has been boosting the import prices of major HDPE grades in India. ICIS's data show that the membrane grade price in February 2018 hit a new high of 33 months.
India's strong demand for HDPE pipe material and hollow supply will be tight
Manufacturers said that HDPE pipe, film and hollow grades are produced by yielding units while HDPE / LLDPE full density units produce other HDPE grades.
Market participants estimate that for the fiscal year ending March 2017, Indian pipe-grade HDPE consumption accounted for 9% of the total PE demand of about 4.6 million tonnes.
Demand for HDPE pipe in India has been strong since last year, with demand for agricultural machinery looking up, an Indian producer said most of the time domestic production units are being used to produce HDPE pipe.
The source said: 'The Indian government encourages farmers to use water-saving technologies to improve the efficiency of agricultural water use, which will help promote the demand for pipes.'
The government has been promoting drip irrigation and sprinkler irrigation technology, which requires the use of HDPE pipe for irrigation.
In addition, the government-led project provided plumbing services to households, including Bhagirathi in Telangana and Jeevan Amrit in Rajasthan, boosting pipe demand in India.
Demand for pipelines in India increased in 2016 as a result of the above government projects.
On the other hand, HDPE pipe exports are strong for Indian producers, especially in China, where the Chinese government calls for generating electricity from coal to gas and building natural gas pipelines of thousands of kilometers.
Another Indian producer said: 'Indian producers have realized the lucrative profits from exporting HDPE pipe to China, resulting in limited enthusiasm for the production of film and hollow grades.'
In addition, the demand for HDPE film in India in recent years has been affected by the ban on plastic bags.
An PE producer in India said: 'Therefore, we believe that the production of HDPE film is unsustainable or unsustainable, the price may reach its peak soon, and the price of pipe will continue to rise.'
A company source said a PE giant in India plans to produce all grades of HDPE to meet a wide range of customer needs but will re-consider the plan in the new fiscal year (starting April 1, 2018) to add additional pipe to the strong demand Yield to make room.