India sees first major PP, PE correction as inflated prices come off peaks

Global polyolefin markets may have just hit their first turning point after an explosive, war-driven rally, with India emerging as the first major market to undergo a sharp correction. After surging to multi-year highs in just six weeks on the back of Middle East supply disruptions, India’s PP and PE markets reversed course abruptly this week. The downturn, driven by falling costs, aggressive domestic price cuts, and mounting import pressure, signals that the market has begun to unwind from unsustainable levels.

From historic rally to sudden reversal

Since late February, the closure of the Strait of Hormuz and widespread disruptions across Middle Eastern supply chains have triggered an extraordinary price surge in India.

By Week 15, prices for Middle Eastern origins had reached extreme levels following a steep, uninterrupted rally from early March. However, the correction that followed in Week 16 was equally striking.

Before the downturn, cumulative gains had exceeded 70% across most PE grades and approached 60% in PP, according to ChemOrbis Price Index data.



The table shows that while prices corrected sharply week on week, they remained significantly above pre-war levels, highlighting both the beginning of the rally and the partial nature of the current reset.

India cracks under pressure

The Indian market saw a decisive correction in Week 16, marking the end of a three-month uptrend.

Import PP prices for Middle Eastern origins fell sharply by $120-130/ton to around $1345/ton CIF India. PE markets also posted notable declines. LLDPE film led the drop with losses of about $110/ton, followed by HDPE film (-$100/ton) and LDPE film (-$50-60/ton).

The shift was reinforced by aggressive domestic action. Major producers slashed list prices by up to INR10,000-11,000/ton ($107-118/ton) in a single move, while simultaneously withdrawing price protection policies — a clear signal that the market had reached unsustainable levels.

Demand reality takes over

The driver behind the correction was not just falling costs, but weakening demand.

As lower-priced cargoes from China and Southeast Asia entered the market, the gap between domestic and import prices widened beyond workable levels. Converters, already strained by elevated prices, resisted purchases, forcing a rapid market reset.

Market sentiment shifted quickly from urgency to caution. Buyers moved back to hand-to-mouth procurement, questioning whether current levels represent a true floor.

A supply-driven rally meets its limits

India’s sharp correction highlights a broader structural weakness in the current cycle.

Unlike the pandemic rally, which was supported by strong demand, the latest surge was almost entirely driven by supply fears. Disruptions in the Middle East restricted availability and inflated replacement costs, pushing prices higher despite fragile downstream consumption.

As feedstock markets stabilized and supply alternatives emerged, this “war premium” began to unwind. India, one of the most price-sensitive and import-reliant markets, became the first to reflect this shift.