But it would take some time for this price rise to reflect in the doemstic markets. The prices in the country were always at 10 to 12 per cent less than international prices and firming up of global prices may lead one to a conclusion that doemstic prices would also rise.

Nevertheless high inventory positions held by both companies and traders have led to situation where the gap in actual selling price in domestic market and CIF prices of imports can widen. According to marketing officials of Reliance and IPCL, their inventory levels have doubled compared to last month's level. Accordingly the companies are in a rush to selltheir stocks faster.

Prices, if any, would weaken in the coming week and would firm up by the end of the month, said a marketing official at IPCL. This view was also shared by marketing officials at Reliance who further added that in the next round of price revisions PE prices would see a substantial jump, while PP may be revised only marginally.

Interestingly, earlier in the month it was Reliance which was the first to announce lower prices of both PP and PE. While the PE prices were lowered from Rs 43.2 per kg to Rs 40.2 per kg, the PP prices were dropped from Rs 39.2 per kg to Rs 34.2 per kg. IPCL, on the footsteps of market leaders dropped its prices by identical percentage points. The drop in prices at the start of this month was basically because of additional shipments booked in February in Indian markets. These shipments were booked in February when the ruling rates were at $450 to $480 per tonne of PP and PE. The arrivals of these shipments along with cancellation of some export orders caused apanic in the market, which resulted in price crash of all polymers across the board.

Presently, the international scenario has reversed. After a gap of over a month, the Chinese market has again opened up. The investigations leading to irregularities of imports from Hong Kong were completed. This opening up of trade channel resulted in a huge spurt of demand for polymers and there seems to be little availability in the international market.

The opening up of trade channels to China also means that imports coming into the country would reduce, which would ease the supply-demand situation in the country and help to reverse the downward price trend.Simultaneously, crude prices have shot up resulting in higher naptha prices, which in turn raised prices of ethylene and propylene in the international market. With ethylene and propylene being the basic building blocks for making polymers, higher prices of these two raw materials have also led to spurt in global polymer prices.

Presently propylene price hasshot up to $400 per tonne, from the levels of $375 a tonne a month back. Since there is value addition of 30-35 per cent between proplyene and polypropylene, many companies would be selling at loss unless there realisation rises to more than $530 per tonne. Along with Chinese demand, the hike in raw material prices would see to it that present hike of polymers is sustained.