Southeast Asia and India Lead PP Price Surge as War Disrupts Supply

Asia’s polypropylene (PP) import markets have seen a sharp rally following the Middle East conflict, but the impact has varied across regions.

While prices have increased across Southeast Asia (SEA), India, and China, the surge has been significantly stronger in SEA and India, highlighting the vulnerability of import-dependent markets to supply disruptions.

Prices Jump Sharply Across Key Markets

Import homo-PP prices have recorded steep gains over the past four weeks:

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

Prices in all three regions are now hovering near four-year highs, reflecting the intensity of the ongoing supply shock.

Import Dependence Drives Stronger Impact

Southeast Asia and India have been hit harder due to their heavy reliance on imports and limited domestic supply alternatives.

China, despite facing reduced Middle Eastern supply and higher import offers, has been relatively better protected due to its strong domestic production base. Buyers in China have been able to shift toward local material, reducing dependence on imports.

In contrast, buyers in SEA and India have fewer options, making them more exposed to reduced supply, limited seller participation, and aggressive price increases.

Price Gap Widens Across Regions

The difference in market dynamics is clearly visible in regional price spreads.

Before the conflict, Southeast Asia prices were just $30–50/ton higher than China. This gap has now widened sharply to around $190–205/ton, showing how much faster SEA prices have risen.

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

Supply Tightness Drives Market, Not Demand

The current rally is largely driven by supply constraints rather than demand strength.

Key factors supporting prices include:

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

In some cases, traders reported not receiving any import offers due to tight supply.

Demand Weakens Despite Rising Prices

Despite rising prices, demand across the region remains weak.

• China: Buyers are shifting to domestic material, with limited interest in imports
• Southeast Asia: Converters are delaying purchases and buying only as needed
• India: Market facing the strongest pressure, with signs of demand slowdown

Industry participants in India have warned that continued high prices could lead to reduced operating rates and financial stress 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 like Southeast Asia and India are likely to stay under greater pressure, while China may remain relatively stable due to its domestic supply support.

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