India’s PP, PE markets buckle under global oversupply and deep local price cuts

India’s import polyolefin market is navigating a severe and sustained downturn, with prices across PE and PP testing structural lows not seen in years. The weakness is rooted in a combination of global oversupply and increasingly aggressive pricing tactics adopted by domestic producers.

Import prices crash across grades

The extent of price erosion from late March 2025 peaks has been stark. Both homo-PP raffia and LDPE film have seen the most dramatic declines, shedding $150/ton each off their midpoints. LLDPE film has fallen by $110/ton and HDPE film is down by around $85/ton in the same period.

The price of homo-PP raffia and injection at $810-840/ton CIF India now represents the lowest level recorded since ChemOrbis began its assessment in early 2022. Even in the short term, prices for PP and LDPE continued to soften through November.

Domestic producers adopt defensive pricing strategy

The primary reason imported material is struggling is the fierce price war waged by India’s major local producers. Domestic suppliers are using aggressive price cuts and incentives to suppress import momentum and clear existing inventories.

In early November, PP saw cuts of up to INR1000/ton. PE cuts were even deeper in late October, with LDPE film reduced by up to INR2500/ton and HDPE/LLDPE by INR1500/ton. This deep discounting strategy makes international offers uncompetitive once duties and taxes are added.

Furthermore, Chinese-origin PP has added significant competitive pressure, often being offered at levels as low as INR80,000-82,000/ton FD India. This combination of local producer action and low-cost Chinese imports makes international offers uncompetitive. As one trader based in Northern India affirmed, “This deep discounting means international offers are simply too high to compete once duties and taxes are added. Import demand has stalled completely.”

The constant downward pressure has shattered confidence in forward pricing. A southern India representative of a major global polyolefins producer noted, “The forward buying curve has flattened entirely because no one trusts the stability of the cost structure.”

The missing infrastructure tenders

The market is facing a critical demand imbalance. The primary reason for sluggish bulk buying is the conspicuously slow momentum from the infrastructure sector, particularly in the northern states where large-scale projects are concentrated.

“We are heading into the latter half of November, and the major tenders for water pipes and cable sheathing that normally hit the market by October are missing,” explained the trader. “The general market activity in northern India is exceptionally slow this year; that critical volume demand that underpins HDPE prices is simply not there,” he added.

Conversely, fast-moving consumer goods (FMCG) and e-commerce-driven packaging remain a vital lifeline. The Southern India producer’s representative pointed out, “The one bright spot is the PE film demand from FMCG sectors; consumption is actually quite good and has buffered the market from a complete collapse.”

Adding to the caution is the macroeconomic pressure on MSMEs (the micro, small and medium enterprises), the backbone of polymer converters, who are holding back orders due to high operating costs and tight credit conditions.

Living on Q1 hopes: Stocking-up non-existent

This persistent uncertainty has resulted in a cautious, low-inventory stance. The market mood is defined by extreme buyer hesitation: Traders and end-user buyers have been hesitant to commit to stocking up material, fearing that any inventory built at current prices could be devalued by future price corrections.

Consequently, stocking up is virtually non-existent. A Delhi-based local trader noted, “Converters are sticking to immediate needs. There’s no appetite for bulk deals right now.” He added that the market is now waiting for new Middle East offers to set the floor. “Right now, people are just sitting tight, waiting on those new offers from the Middle East; whatever they come in at, that’ll give us a clearer picture of where this market is actually heading next.”

Given these headwinds, the consensus view among market players is that the remainder of the calendar year is a "goner" for any substantial price recovery. The market will continue to drift sideways or marginally lower, with volumes prioritized over margins.

Summarizing this outlook, the southern India source concluded, “We are essentially writing off this quarter. The entire market is now hoping for a demand push in Q1 2026, driven by a post-budget allocation of funds for infrastructure projects, which would finally pull the bulk grades, and by renewed restocking before the summer season.”