Recycled Polypropylene December Prices in India Nosedived By 9% on Bearish Futures of its Virgin Counterpart

After staying on the uptrend continuously since September 2021, the prices of recycled polypropylene in India exhibited a steep downfall during December settling at INR 108990 (USD 1439.6) per MT Ex-Delhi NCR. According to the ChemAnalyst database, the current prices of recycled polypropylene registered a decrease of 9% from the average prices recorded in November and have levelled the trends observed during mid-October 2021.

The recent diminution in recycled polypropylene prices was triggered by the fall in the virgin polypropylene market fundamentals under the impact of the capping in the horrendously mounting upstream crude oil futures in the international market following India and other major countries’ synchronized strategic reserve oil release during the second half of November. The ripple effect of the upliftment in the crude oil inventories was felt in its downstream propylene and polypropylene market dynamics which also reflected tamed fundamentals. The improving upstream supplies have caused big Indian manufacturers like Reliance, MRPL and IOCL to drop their quoted prices for virgin polypropylene in the recent weeks. With the curtailment in the base prices of virgin polypropylene the producers of recycled counterparts were compelled to implement a negative revision in their prices in the fear of losing contracts to producers of virgin polypropylene.

Recycled polypropylene is a thermoplastic polymer that is prepared from virgin polypropylene plastic wastes generated from industries, the agricultural sector, and consumer usage, which are otherwise dumped into landfills. The economically viable recycled version of polypropylene is utilized in a wide variety of end-user industries including packaging, automotive, construction, textile, and healthcare.

As per ChemAnalyst, the growing pressure of the government towards capping plastic usage and building circularity in plastics has caused the recycled polypropylene markets to prosper speedily on the Indian lands and project a bullish outlook this year. However, the recent downfall in the recycled polypropylene prices is expected to stay prevalent in the Indian market throughout December and in early 2022 on the bearish market fundamentals of virgin polypropylene raw material. The manufacturers will have to oblige to low selling price dynamics in order to stay competitive and sustain their profit margins.