India PP, PE outlook for 2025: Players eye brighter Q1 despite current bearishness

Import prices of polyolefins have fallen in India ahead of the year-end amid lackluster demand for end-products and a perception of ample availability in the country. Suppliers, in the middle of paring down excess inventories to hold more cash before closing their books for the year, have offered discounted prices for large buyers but deals have been few and far between. Despite these bearish conditions, traders remain optimistic about a market recovery in early 2025.

“Typically, the year-end market sees mostly sell-offs as suppliers try to reduce inventories with a view to showing more cash in their books. This normally leads to lower prices. At the same time, we’ve seen sluggish demand for a prolonged period in both the PE and PP markets in the second half of the year, which has led to lower prices,” explained a trader based in New Delhi.

Prices fall as buyers on wait-and-see

Import prices of both PP and PE have seen a sliding pattern over the last month, as buyers have mostly stayed in a wait-and-see mode.

“The trend in the PP market has mostly been flat to lower over the past month. However, we’re hopeful there could be a demand revival going into 2025. We’ve seen domestic producers offering good discounts. These may be taken off once demand sets in early January,” a trader commented.

According to ChemOrbis Price Index, homo-PP raffia and injection prices for Mid-Eastern origins are currently standing at $935-965/ton CIF India, $5-15/ton lower than levels noted a month ago. The current weekly average represents the lowest level since mid-January.

Traders also pointed to a wide gap between selling and buying ideas in the import PP market. “The local market is well supplied and producers in India are offering highly competitive prices. Import sellers are struggling to match these levels,” a Mumbai-based trader noted.

As far as the PE markets are concerned, prices for Middle Eastern origins were noted $10/ton lower at both ends from a month ago at $1090-1130/ton for LDPE film, $15/ton down at $915-955/ton for LLDPE film, while HDPE film levels were at $920-960/ton, down by $20/ton, all on a CIF India, cash basis. As per ChemOrbis data reveal that LDPE prices are at their lowest since February, LLDPE since April, and HDPE film prices at their weakest since record-keeping began in January 2022.



Supply pressures persist

Traders said prices have also been hit on the perception of ample availability in Asian markets, especially in China. “Some Asian suppliers, including the Japanese, who are traditionally sellers to China, have now found a limited outlet in that market, which has led to it looking more at India to sell surplus products,” a trader noted. Japanese polymer imports draw zero duty in India, which means lower import prices, compared to imports from India’s other traditional polyolefin trading partners.

Additionally, both LLDPE and HDPE domestic markets in India have seen ample availability, with local output considered adequate for the current demand. “It is difficult for LLDPE and HDPE prices to rise in the current market situation. However, we are likely to see a strengthening in demand once the new year starts as infrastructure projects are ramped up,” the trader added.

“We haven’t seen a lot of capacities going offline in India lately, and this could mean buyers resorting to more local sources for their requirements,” a Delhi-based trader said. Players said local availability is more pronounced in the HDPE and LLDPE markets than for LDPE and PP.

Some market participants also pointed out that there was some resistance by LDPE sellers to let go of material at the lower ends. “We expect the LDPE market to strengthen in the weeks ahead as packaging demand rises,” a trader said.

Optimism for early 2025

While the market’s near-term direction remains uncertain, traders expect activity to pick up in the New Year. Downstream production is anticipated to ramp up in preparation for higher demand before the monsoon season begins in June. Additionally, infrastructure spending is projected to rise in early 2025, bolstering optimism among market participants.

The pipe market, which has been dormant for much of the second half of 2024, is expected to revive in early 2025, providing a boost to HDPE prices. “This recovery in HDPE could positively impact other PE prices as well,” said a trader.

“The Indian government that took charge earlier this year should be settling in and the higher outlays for infrastructure that were announced in the budget for the year need to be spent before the financial year ends in March 2025. We expect spending on infrastructure to rise in early 2025, which would certainly have a positive impact on polyolefin prices in the country,” another trader commented.