Trade Resources Industry Views India-Singapore FTA to Have Limited Impact on Polyethylene Initially

India-Singapore FTA to Have Limited Impact on Polyethylene Initially

Polyethylene shipments from Singapore to India are expected to pick up in the long term following a free trade agreement taking effect December 1, sources said Friday.

But sources in both markets do not expect this to have much impact initially, because the duty change is small and demand has been poor.

Singapore's PE shipments to India currently face a 0.6% duty of their CFR value, according to International Enterprise Singapore. This will be removed December 1, according to an official statement from India's finance ministry November 23.

One Indian producer was watching for signs the agreement could increase competition with Singapore producers.

"Our local selling price may be decreased," he said.

India imports around 1.2 million mt/year of PE from Singapore, according to Indian-based sources.

In 2016, India's domestic PE production will increase from plant startups, possibly leading to a slight surplus.

The new projects coming on stream include ONGC Petro-additions' two 360,000 mt/year high density polyethylene/linear low density polyethylene swing plants and a standalone HDPE plant with a capacity of 340,000 mt/year at the Dahej Special Economic Zone in Gujarat; Brahmaputra Cracker and Polymer Limited's 220,000 mt/year HDPE/LLDPE swing facility; GAIL's 400,000 mt/year PE plant at its Pata facility in Uttar Pradesh; and Reliance's new 450,000 mt/year of HDPE/LLDPE and 550,000 mt/year LLDPE plants in Jamnagar.

Singapore currently produces about 2.3 million mt/year of PE, including 400,000 mt/year of HDPE, 1.9 million mt/year of LLDPE, mostly metallocene grade, and around 200,000 mt/year of LDPE.

Japanese producer Prime Polymer has started trial production at its new 300,000 mt/year metallocene hexene-based LLDPE plant on Jurong Island, Singapore.

Source: http://www.platts.com/latest-news/petrochemicals/singapore/india-singapore-fta-to-have-limited-impact-on-26292037
Contribute Copyright Policy
Topics: Metallurgy