PolymerTuesday, 23 June 2026·India
India's PE and PP Markets Stay Firm Despite Monsoon Slowdown and Feedstock Constraints
India’s domestic polyolefin markets continued to display strength this week despite seasonally weak demand during the monsoon period. Polypropylene (PP) prices moved higher by another INR 1,000/ton ($11/ton), while polyethylene (PE) prices largely stabilized following earlier gains. Major producers also introduced price protection programs for PE to support purchasing activity as buyers showed increasing resistance to further increases.
The contrasting performance of PP and PE reflects the ongoing impact of feedstock shortages, which have tightened supply conditions even as downstream demand remains subdued.
LPG Prioritization Tightens Feedstock Availability
A key factor supporting domestic polymer prices has been the government's focus on securing LPG supplies. Amid ongoing shipping disruptions affecting Middle Eastern trade routes, refiners have been directed to maximize LPG production to ensure adequate availability of household cooking fuel.
As a result, significant volumes of propane and butane that would normally be used in petrochemical production have been redirected toward LPG output. This has reduced the availability of critical feedstocks required for monomer and polymer manufacturing.
The policy has created tighter supply conditions across the petrochemical chain, particularly for PP and certain PE grades, despite the absence of strong demand growth.
Production Cuts Add to Supply Pressure
Feedstock restrictions have coincided with operational disruptions at several major facilities, further tightening product availability.
Reduced operating rates at key petrochemical complexes, alongside maintenance shutdowns and technical issues at regional plants, have limited the flow of material into the domestic market. These supply-side challenges have amplified the impact of feedstock shortages and helped maintain upward pressure on polymer prices.
Market participants noted that local availability has tightened considerably, even as converters reduce operating rates due to seasonal demand weakness and weather-related disruptions.
PP Outperforms While PE Meets Resistance
Producers initially attempted to raise both PP and PE prices in response to rising production costs and tighter supply. However, PE buyers showed growing resistance after multiple rounds of increases earlier this month.
As purchasing activity slowed, suppliers opted to introduce price protection measures for PE, providing buyers with reassurance against potential future price declines. This helped stabilize market sentiment and maintain order volumes.
PP, however, continued to outperform due to tighter supply conditions and stronger pricing support, allowing producers to implement another increase despite weak seasonal demand.
Import Market Remains Cautious
Unlike the domestic market, import activity has remained relatively subdued. Offshore PE and PP offers have shown limited movement following recent declines, but buyers remain cautious about committing to new cargoes.
A major factor influencing import decisions is uncertainty surrounding the temporary customs duty waiver scheduled to expire on June 30. Many importers are reluctant to book deep-sea cargoes until there is greater clarity regarding future duty structures.
This hesitation has restricted import volumes and reduced the ability of overseas material to ease domestic supply tightness.
Demand Remains Weak Despite Supply Constraints
While supply conditions remain supportive, demand continues to be affected by the monsoon season. Construction activity, outdoor operations, and logistics movements have all slowed, reducing consumption across several downstream sectors.
Converters have largely adopted a hand-to-mouth purchasing strategy, buying only the volumes needed for immediate production requirements. Inventory levels remain tightly controlled as buyers seek to avoid unnecessary exposure in an uncertain market environment.
Market Outlook
India’s polyolefin market is currently being shaped more by supply-side disruptions than by demand fundamentals. Feedstock diversion toward LPG production, ongoing plant disruptions, and cautious import activity have collectively tightened material availability, particularly for PP.
Until regional shipping conditions improve and feedstock supplies normalize, domestic PP and PE markets are likely to remain supported despite the seasonal slowdown in demand.
Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.
The contrasting performance of PP and PE reflects the ongoing impact of feedstock shortages, which have tightened supply conditions even as downstream demand remains subdued.
LPG Prioritization Tightens Feedstock Availability
A key factor supporting domestic polymer prices has been the government's focus on securing LPG supplies. Amid ongoing shipping disruptions affecting Middle Eastern trade routes, refiners have been directed to maximize LPG production to ensure adequate availability of household cooking fuel.
As a result, significant volumes of propane and butane that would normally be used in petrochemical production have been redirected toward LPG output. This has reduced the availability of critical feedstocks required for monomer and polymer manufacturing.
The policy has created tighter supply conditions across the petrochemical chain, particularly for PP and certain PE grades, despite the absence of strong demand growth.
Production Cuts Add to Supply Pressure
Feedstock restrictions have coincided with operational disruptions at several major facilities, further tightening product availability.
Reduced operating rates at key petrochemical complexes, alongside maintenance shutdowns and technical issues at regional plants, have limited the flow of material into the domestic market. These supply-side challenges have amplified the impact of feedstock shortages and helped maintain upward pressure on polymer prices.
Market participants noted that local availability has tightened considerably, even as converters reduce operating rates due to seasonal demand weakness and weather-related disruptions.
PP Outperforms While PE Meets Resistance
Producers initially attempted to raise both PP and PE prices in response to rising production costs and tighter supply. However, PE buyers showed growing resistance after multiple rounds of increases earlier this month.
As purchasing activity slowed, suppliers opted to introduce price protection measures for PE, providing buyers with reassurance against potential future price declines. This helped stabilize market sentiment and maintain order volumes.
PP, however, continued to outperform due to tighter supply conditions and stronger pricing support, allowing producers to implement another increase despite weak seasonal demand.
Import Market Remains Cautious
Unlike the domestic market, import activity has remained relatively subdued. Offshore PE and PP offers have shown limited movement following recent declines, but buyers remain cautious about committing to new cargoes.
A major factor influencing import decisions is uncertainty surrounding the temporary customs duty waiver scheduled to expire on June 30. Many importers are reluctant to book deep-sea cargoes until there is greater clarity regarding future duty structures.
This hesitation has restricted import volumes and reduced the ability of overseas material to ease domestic supply tightness.
Demand Remains Weak Despite Supply Constraints
While supply conditions remain supportive, demand continues to be affected by the monsoon season. Construction activity, outdoor operations, and logistics movements have all slowed, reducing consumption across several downstream sectors.
Converters have largely adopted a hand-to-mouth purchasing strategy, buying only the volumes needed for immediate production requirements. Inventory levels remain tightly controlled as buyers seek to avoid unnecessary exposure in an uncertain market environment.
Market Outlook
India’s polyolefin market is currently being shaped more by supply-side disruptions than by demand fundamentals. Feedstock diversion toward LPG production, ongoing plant disruptions, and cautious import activity have collectively tightened material availability, particularly for PP.
Until regional shipping conditions improve and feedstock supplies normalize, domestic PP and PE markets are likely to remain supported despite the seasonal slowdown in demand.
Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.
