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India PP, PE, PVC outlook for 2024: After 2023 records, will demand boom continue?

by Merve Sezgün - msezgun@chemorbis.com
by Esra Ersöz - eersoz@chemorbis.com
  • 13/12/2023 (10:22)
India experienced a significant surge in PE, PVC, and PP imports in the first three quarters of 2023, as per ChemOrbis Stats Wizard data. When the January-September data is annualized, it suggests that 2023 is poised to set new records for imports in all three polymers. Now, the looming question is whether India will sustain this precipitous growth momentum in imports into 2024.

A deep look at 2023 data

PE: India becomes the second largest buyer, leaving Türkiye and Vietnam far behind

Data reveal that India’s PE imports exceeded 3 million tons in the first three quarters of 2023, signaling an impressive surge of 87% from the previous year. This data – albeit lacking 3 months for the complete year – already surpasses the total volume recorded for the entire year of 2022, standing at approximately 2.4 million tons.
Should the January-September data be annualized, India’s total PE imports could breach the 4 million ton-mark by the end of 2023, solidifying a new record. Although Q4 imports may lose some speed – as Indian buyers have widely taken time to digest the inventories built inside – the PE is still set for all-time high imports.

Meanwhile, traditionally trailing behind Turkey in PE imports, India’s surge in 2023 signifies a notable shift. Last year, India overtook Turkey by importing around 12% more PE. In the first three quarters of 2023, India’s growth in PE imports has gathered momentum as Türkiye imported around 1.9 million tons of PE, while India’s total PE imports – reaching around 3.1 million tons – have stood 61% above Turkey’s.

Accordingly, India has become the second largest PE buyer of the world, right after China, outpacing Türkiye and Vietnam respectively as the second and third largest PE buyers of 2021 and backwards.

PVC: Imports boom, smashing the 2019 record
   
India, as the world’s largest PVC buyer, imported over 2.4 million tons in the January-September period of 2023 – an increase of about 75% from the same period the previous year. This surpasses the total volume of 1.8 million tons recorded for the entirety of 2022 and even the previous record-high in 2019 at 2.13 million. Annualizing the data, India’s total PVC imports may reach around 3.2 million tons by the end of 2023, unless a major slowdown is seen.

China remained as the top supplier by a landslide in India’s PVC imports despite the safeguard investigation that started in September 2022, for which the market is still waiting for clarity. Meanwhile, the competition is likely to get fierce in India between China and the US given the possible exodus of US PVC from Europe following the antidumping probe that has recently kicked off.

PP: Imports display a comparatively modest growth, but still set for an all-time high

India imported over 1.3 million tons in the January-September period of 2023—an increase of 35% from the previous year. In 2022, total PP imports were recorded at 1.5 million tons. If the current pace continues, India’s total PP imports could reach around 1.8 million tons by the end of 2023.

In comparison to PE and PVC markets with respective yearly growth rates of 87% and 75%, the 35% growth in PP imports can be considered relatively small. However, ChemOrbis Stats Wizard still suggests a record-high level for import demand in 2023.
Also noteworthy that this robust growth in imports is taking place despite the substantial domestic capacity installed in India. ChemOrbis Production News Pro suggests India houses a total PP production capacity of around 6 million tons, almost half of which is owned by Reliance. Earlier this year, HPCL-Mittal Energy Ltd (HMEL) also started up a new PP plant with 500,000 tons/year capacity in Bhatinda, Punjab.

Driving forces: infrastructure development and robust economy

The significant growth in PE and PVC demand is primarily attributed to India’s extensive infrastructure projects. Demand for High-Density Polyethylene (HDPE), especially for pipe-grade material, is particularly noticeable, driven by large-scale highway maintenance and expansion projects across the nation.

India – the world’s fastest-growing major economy in the last two years – has also been performing comparatively better than the rest of the world, meanwhile. GDP rose 7.6% in July - September from a year ago, far exceeding expectations. Manufacturers boost production, consumption picks up pace and Prime Minister Narendra Modi’s government ramps up investment before polls next year. Growth has been resilient in spite of surging inflation and the RBI’s six interest rate hikes since last year.

The recent data also showed the industrial output growth hit a 16-month high in October, underpinned by broad-based growth across all sectors, especially the electricity segment. Industrial production also grew during April to October to 6.9 percent from the same period last year.

Will India sustain this demand growth momentum in 2024?

The question that looms large is whether India will maintain this booming demand in 2024. Analysts expect India to remain as the fastest-growing major economy in 2024 since the urbanization and industrialization process reaches the rapid take-off phase.

According to Reuters, India may see a steady and robust growth for the next two decades since the country’s economy and demographics resemble the periods of China between the late 1990s and early 2000s.

Economy will obviously boost polymer demand

As has been the case in 2022 and 2023, polymer demand from India is, needless to say, to be fueled by the rapid growth expected in overall consumption and manufacturing in the coming years, even though spending may slow down right after the elections in the short term in a bid to tame the inflation.

Considering the net-importer position of India in three major polymers, namely PP, PE and PVC, the key to watch will be domestic capacity additions in terms of estimating the demand growth for imports.

There are several mega projects to meet the substantial growth in demand; however, most are not likely to come online before 2026, – please check ChemOrbis Production News Pro for details. Therefore, India may continue to promise healthy rebound in demand in the next few years.

PP import demand growth may lose steam

Unlike PE and PVC, PP imports may rise but at a slower pace. Following the start-up of the 500,000 tons/year PP plant in Bhatinda, Punjab the India owned by HPCL-Mittal Energy Ltd (HMEL), India is gearing up for new capacities in 2024. HPCL Rajasthan PC plans to start up two PP plants, each with a production capacity of 490,000 tons/year, alongside LLDPE and HDPE plants—each with a 416,000 tons/year capacity—in the first quarter of 2024.

Nayara Energy Limited’s new 450,000 tons/year PP plant is currently in the commissioning stage, with full rates expected by March 2024. GAIL’s new 60,000 tons/year PP plant, initially expected to start up early in 2024, awaits further updates.
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