Indian players: Budget 2018 might boost demand for petchem

On Thursday, the Indian government announced spending budget for 2018, which allocate a considerable amount of fund on developing infrastructure and boosting agricultural production.

A total of RS 14.34 trillion (USD225.5 billion) is allocated to support the price of crops, which would benefit 86% of small and marginal farmer in the country. Besides, the government is planning to build new markets and roads in line with the “Operation Scheme” plan.

The announcement sparks optimism in the petrochemical business, especially for PVC and PE, which are widely applied in the agriculture and construction sectors. “Though many experts are still having doubt about the plan, however we think the spending could create more businesses and boost the demand,” a source said.

Indian players have been generally expecting higher offers for PVC and HDPE in the near term given the tight supply condition and healthy buying interest. The much expected positive effect from Budget 2018 has yet to generate any immediate effect, however, sentiment might continue to improve in month to come.