India to remain bright spot for petchem demand in 2025

According to industry executives at India Energy Week, India is set to remain a bright spot for petrochemical demand in 2025, even as global consumption lags supply, driven by rising demand for electric vehicle components, solar panels, and household appliances. Bharat Petroleum’s Director of Refineries, Mr. Sanjay Khanna, highlighted strong local demand in sectors like propylene. At the same time, Indian Oil Chairman, Mr. A S Sahney, expects demand to remain resilient this year. Petrochemicals are key building blocks for various products, including plastics, paints, and pharmaceuticals. TotalEnergies’ Global Head of Petrochemical Trading, Mr. Ganesh Gopalakrishnan, noted steady demand from the automobile sector and a recovery in white goods consumption.  

Despite this, global petrochemical margins will remain weak for the next few years due to sluggish demand from China and excess supply from new Chinese and Middle Eastern plants. He stated that the industry awaits China’s incentive plan in March, which could boost demand and improve margins. Indian refiners, insulated from losses due to in-house petrochemical feedstock production, have fared better than standalone plants relying on imported feedstock, which have faced negative margins for three to four years, said Analyst at Rystad Energy, Mr. Pankaj Srivastava. India’s petrochemical sector investments remain strong, with Rs. 7,54,029 crore (US$ 87 billion) expected over the next decade to meet rising demand. India’s annual petrochemical consumption stands at 25-30 million metric tons. The sector, valued at Rs. 19,06,740 crore (US$ 220 billion) is projected to reach Rs. 26,00,100 crore (US$ 300 billion) by 2025, according to Minister of Petroleum and Natural Gas, Mr. Hardeep Singh Puri. Nayara Energy, Haldia Petrochemicals, and Petronet LNG have announced capacity expansions, with Petronet LNG constructing a 750,000 metric tons-per-year propane dehydrogenation unit and a 500,000 tpy polypropylene unit in Gujarat. Petronet LNG’s Chief Executive, Mr. Akshay Kumar Singh, expects petrochemical margins to recover within three years. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.