India and Southeast Asia See Sharper PP Price Surge Than China Amid Supply Shock

Asia’s polypropylene (PP) import markets have faced major disruption since the onset of the Middle East conflict, with prices rising sharply across all regions. However, the impact has been uneven, with India and Southeast Asia experiencing a much stronger surge compared to China.

This divergence highlights the higher vulnerability of import-dependent markets to geopolitical supply disruptions.

Prices Jump to Multi-Year Highs

Import homo-PP prices have increased significantly over the past four weeks:

• Southeast Asia: up 56%
• India: up 55%
• China: up 42%

Prices across all three markets are now near four-year highs, reflecting the severity of the ongoing supply crunch.

Import Reliance Puts India and SEA Under Pressure

Southeast Asia and India have been more heavily impacted due to their strong dependence on imported material and limited domestic supply alternatives.

China, although affected by reduced Middle Eastern supply and higher import offers, has been relatively better supported by its large domestic production base. This has allowed buyers in China to shift toward local supply and limit exposure to rising import prices.

In contrast, buyers in India and Southeast Asia have fewer alternatives, making them more exposed to tight supply, limited availability, and aggressive price increases.

Regional Price Gap Expands Significantly

The difference between regional markets has widened sharply.

Before the conflict, Southeast Asia prices were only $30–50/ton higher than China. This gap has now expanded to around $190–205/ton, reflecting a much stronger price reaction in Southeast Asia.

China’s domestic supply has helped contain price increases, while India and SEA continue to face stronger upward pressure.

Supply Tightness Drives the Rally

The current price surge is mainly driven by supply constraints rather than demand strength.

Key factors supporting the market include:

• High feedstock costs
• Reduced exports from the Middle East
• Shipping disruptions
• Uncertainty over cargo availability

In some cases, traders reported not receiving import offers at all due to severe supply shortages.

Demand Remains Weak Across Markets

Despite rising prices, demand conditions remain fragile across the region.

• China: Buyers are resisting high prices and shifting to domestic material
• Southeast Asia: Converters are delaying purchases and buying only as needed
• India: Facing the strongest pressure, with signs of demand slowdown

Market participants in India have warned of potential demand destruction, with lower operating rates and financial stress emerging in downstream sectors.

Market Outlook

With supply disruptions continuing and demand struggling to keep pace with rising costs, the PP market is expected to remain volatile.

Import-dependent regions such as India and Southeast Asia are likely to remain under greater pressure, while China may stay relatively more stable due to domestic supply support.

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