RIL hikes prices of key petrochemical items
MUMBAI:Reliance Industries Ltd (RIL) raised prices of at least seven key petrochemicals in the last quarter to offset higher crude oil prices and counter the effect of a weakening rupee.
Bulk chemicals traders, suppliers for RIL’s petrochemical products and analysts tracking the company said it raised prices by 10-21% in the second quarter of this fiscal while year-on-year increase is 17-61%.
These products include purified terephthalic acid (PTA), monoethylene glycol (MEG), polyester staple fibre (PSF), partially oriented yarn (POY), polypropylene or high density polyethylene (HDPE) and linear alkyl benzene (LAB).
“Its more about the rupee decline and crude price which have increased petrochemicals prices in Asia. There is not much change in terms of demand-supply. Besides, RIL commands the highest premium in the Indian petrochemicals market. If you see pricing for RIL’s key products, it has been consistently going up in past three months,” an analyst tracking RIL said on condition of anonymity.
Crude prices, which have been on the rise, are expected to touch $100 per barrel in a few months. The rupee, on the other hand, weakened further and settled at 73.76 against the dollar on Friday.
“Sustained, substantial increase in crude oil prices has pushed up petrochemical feedstock prices over the past few months. Geopolitical situation and expectation of a tighter oil market has further impacted the raw material cost. Globally, petrochemical producers have absorbed a part of the higher feedstock costs while pricing products,” said RIL in an emailed reply.
Analysts tracking RIL said the firm raised PTA prices to ₹81,600 a tonne till September against ₹50,750 a tonne last September. This August, PTA prices were at ₹69,000 a tonne. Prices for HDPE has gone up 24% to ₹104,720 a tonne against September 2017.
PTA is a raw material used in making multi-purpose plastics. HDPE is used for packaging household and industrial chemicals such as detergents.