Tightening Supply Drove Up Propylene Prices, Strong Pullback Expected in November

In October, the domestic propylene market in India experienced a significant surge in prices, driven by a notable contraction in supply. This was largely due to concentrated maintenance activities at key production facilities, combined with a spike in restocking demand from downstream sectors. As of early November, the benchmark price for propylene reached a historic peak, despite a slight decline from the start of the month.

The domestic production of propylene in October was recorded at 5.0362 million metric tons, marking an increase from the previous month. However, the industry's average capacity utilization rate experienced a slight decline, influenced by the shutdown of major facilities and delayed restarts.

Globally, propylene prices have been affected by volatile feedstock costs, particularly due to surging crude oil prices and geopolitical tensions impacting supply chains. Despite these challenges, demand for polypropylene, a derivative of propylene, remains strong, especially in sectors like packaging and automotive.

Looking ahead, there is a strong expectation of a price pullback in November as supply constraints ease and production stabilizes.

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