• What’s new?

India will impose a ban on PET bottles of 200ml or smaller on 2 October. There are also other single used plastics in the list, including plastic bags, cups, plates, and straw. This follows the European Commission, which had voted to ban single-used plastic cutlery, plates, cotton bud sticks, straws, drink stirrers, balloon sticks, food containers, and polystyrene cups by 2021.

• Analysis

India pet demand is around 1mt (4% of global demand) and growing around 15-18% pa. The PET producers in India are talking to authorities to exclude small pet bottles from this potential ban like excluded in the US and Europe as PET is 100% recyclable. In the event that small (200ml) bottles are banned then the converters will still have the option to switch to 220ml bottles.

• Action/ Recommendation

We expect no material impact from this news. PET offers cheaper price and lighter weight than other materials such as glass and aluminum. IVL’s share price fell 7.4% yesterday as market is concerned on rising oil prices to reduce its margins. We believe that this is temporary as higher cost will be passed onto product prices. Maintain BUY, TP Bt57/sh.