Early monsoon arrival dampens India PP, PE market sentiment

India’s PP and PE markets have entered a bearish phase, with demand tapering off ahead of the monsoon season and import prices continuing their downward trajectory. Although geopolitical tensions between India and Pakistan have eased, a seasonal slowdown, falling upstream costs, and rising inventories have all combined to erode buying interest, pushing polyolefin prices lower across the board.

According to ChemOrbis Price Index data, import prices for HDPE film from the Middle East have fallen by around 6% over the past month, while LLDPE film prices dropped by about 5%. LDPE film from the region declined by 3%, and PP raffia import prices fell by around 4% during the same period.



Bearish sentiment likely to persist

In the most recent week, Middle Eastern homo-PP raffia prices declined further by $10/ton, while PE film prices dropped by $10-20/ton.

Buyers were anticipating further price cuts for June shipments from the Middle East. During the monsoon season, demand from the construction and agriculture sectors typically falls, as building activities slow and agricultural offtakes weaken. Buyers generally prefer to wait for the rains to subside before resuming purchases. The monsoon is now expected to arrive in southern India by May 27, about five days earlier than usual.

“With the monsoon around the corner, we don’t expect any revival in the polyolefins market in the near term. In fact, prices may fall further next month due to additional cost pressure on producers,” said a source at a major global polyolefin producer in southern India.

Crude, feedstock price slide adds pressure

Apart from the monsoon, traders also pointed to the sliding crude oil prices, with propylene and ethylene prices also falling significantly. Brent crude futures had fallen to the low-$60s/bbl in the previous week, though they have since rebounded to around $65/bbl. Asian ethylene prices have fallen by about 4% over the past one month, while propylene has fallen by about 3%, as per ChemOrbis Price Wizard.

Despite the slight recovery in crude, traders do not expect this to lift PP and PE import prices in the near term. Demand remains too weak to support any rebound, and the overall market outlook continues to be bearish. As a result, the downtrend in polyolefin prices may outpace the decline in feedstock costs in the coming weeks.

Weak demand and high supplies weigh on market

“The weak demand situation has also meant burgeoning supplies of both PE film as well as PP raffia. It may take some time for the excess supplies to be disposed of,” a trader said. “Domestic prices may keep falling as we find demand for finished products is also weak,” he added.

Another trader echoed similar concerns. “Buying appetite is very weak across most polymer markets. No one is in a rush to place new orders, especially with plenty of material already in the system. Normally, we would expect stronger demand in the weeks leading up to the monsoon, but that didn’t materialize this year, and with the monsoon approaching, things have only gotten worse,” he noted.

Chinese supply a major bearish factor in PP market

Meanwhile, traders continued to point out ample availability of Chinese PP raffia putting immense pressure on import prices into India. Some players said homo-PP raffia from China was available at prices lower than $900/ton CIF India. “We think traders and producers from the Middle East would have to reduce prices significantly to compete with the Chinese,” a trader said.

The rise in inventories, coupled with lower uptakes of both PP and PE, has resulted in a downbeat sentiment from sellers, keeping prices lower, but this hasn’t meant increased procurement, as buyers remained hesitant.