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Seasonal Lull Brought Dullness to Plasticizers Industry in India

Seasonal Lull Brought Dullness to Plasticizers Industry in India

Seasonal Lull Brought Dullness to Plasticizers Industry in India

  • 16-Dec-2021 4:50 PM
  • Journalist: Jai Sen

Post witnessing a seasonal peak, plasticizers are now facing dullness in demand from the downstream consumer segment. Recent scenario in India proclaims that seasonal lull has arrived for polymers as well as for plasticizers in domestic market, making it harder for traders to sustain offtakes. As per several market sources, window of negotiations between traders and consumers has been widened due to overall market dullness that has opportune procurers to buy cheaper cargoes. Furthermore, traders have also increased their destocking practices, which is anticipated to remain persistent till the year end. Consequently, some major plasticizers in India, including Dioctyl Phthalate and Dibutyl Phthalate witnessed a sharp decline of more than 11% and 5.5% respectively within past 6 weeks.

During October, Indian packaging sector was soaring on the back of significantly high festive demand in domestic market amid supply halts of raw materials from China. The situation filled the Indian polymer sector with optimism and induced high offtakes from consumer segment. Consequently, plasticizers demand also rose effectively and a significant elevation in its prices was observed in domestic market. Later in November, when festive season passed, demand fundamentals for polymers started showing dullness, whose effect was also been observed on their prices. These sudden changes in market dynamics, brought prices back from a sky-high value and paved the way to normalcy.

As per ChemAnalyst analysis, plasticizers demand might not show sudden buoyancy in near term across the Indian market, as current market fundamentals will remain persistent for further period in India. Furthermore, in order to destock their inventories, traders may keep their negotiating window wide open till the end of this year. However, moving to next quarter i.e., Q1 2022, prices are not expected to maintain this much of dullness, as the demand fundamentals are expected to rise in India. Moreover, there are little possibilities that threat of Omicron variant might induce some imbalance in trade of several commodities, as other variants have done before.

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