Plastic processors hit hard as few traders create artificial scarcity

New Delhi, Dec 6 : Plastic, owing to man’s own folly, had been often branded a menace. But it emerged a hero in humankind’s battle against coronavirus. PPE kits worn by Covid-19 warriors the world over, are made from plastics. Cocooned in these kits, the warriors went about their job, saving millions of lives.
Unfortunately, some petty-minded profiteers hell-bent on making short-term gains have plunged the industry into crisis.
As India is gradually emerging from the Covid-19 lockdown, some traders have resorted to hoarding plastic raw materials and making a quick buck by selling it to genuine small processors at a substantial premium over the list prices of resin manufacturers.
S. Dandekar of APC Polymers Pvt. Ltd. said, “Plastic raw materials such a PVC, Polyethylene (PE) and Polypropylene (PP) and ABS are being sold in the open market at a substantial premia by a section of large and MSME plastic traders and a few processors-turned-resellers. Their unethical ways have triggered panic in the plastic raw materials market, pushing prices significantly above the list prices offered by resin manufacturers.” Describing the market situation, Dandekar said, “PVC is sold at a premium of Rs 15-25 per kg based on grades, PEs at a premium of Rs 4 per kg, and PP at Rs 4 per kg over and above the manufacturers’ list prices for PVC (high K) Rs 108 per kg, PEs Rs 87-108 per kg and PP Rs 96-97 per kg.” As per the modus operandi, these traders and processors are buying very large quantities from domestic, as well as overseas resin manufacturers, claiming substantial volume-based discounts, and selling it to processors at a substantial profit. Some of the processors are not converting raw materials into final products. Instead, they are reselling it to other processors at huge premia, thereby making a quick buck without even engaging in their main business of making plastic products. This has resulted in artificial scarcity of plastic raw materials and increased incidences of higher prices and squeezing margins for genuine processors.