India is likely to drive petrochemical demand growth in 2025, outpacing global trends where supply exceeds consumption.
Industry leaders at the India Energy Week conference highlighted increasing demand for electric vehicle components, solar panels, and household appliances as key factors fueling this momentum.
Bharat Petroleum’s Director of Refineries, Sanjay Khanna stated, “We are seeing good local demand in the sectors like propylene where our company operates.”
Indian Oil Chairman AS Sahney echoed this sentiment, asserting that demand will likely remain steady throughout the year.
Petrochemicals play a crucial role in various industries, serving as essential components in plastics, paints, and pharmaceuticals.
Ganesh Gopalakrishnan, TotalEnergies’ Global Head of Petrochemical Trading, pointed to robust demand from the automobile sector and a rebound in white goods consumption.
However, global petrochemical margins are likely to remain weak due to sluggish demand from China, the world’s largest petrochemical consumer, and an oversupply from new production facilities in China and the Middle East.
“The industry is waiting for China to announce its big incentive plan in March,” TotalEnergies’s Gopalakrishnan noted. He further added that such measures could help revive demand and improve global petrochemical margins.
Despite these global headwinds, Indian refiners have remained resilient.
Pankaj Srivastava, an analyst at Rystad Energy, explained that refiners in India have been shielded from losses due to their in-house production of petrochemical feedstock, naphtha.
In contrast, standalone plants relying on imported feedstock have faced negative margins for the past three to four years.
Rising Investments In The Petrochemical Sector
Investment in India’s petrochemical sector continues to rise.
Union Minister for Petroleum and Natural Gas Hardeep Singh Puri previously stated that the country will likely receive $87 billion in investments over the next decade to meet growing demand.
He noted that India consumes 25 to 30 million metric tons of petrochemical products annually, with the sector likely to grow from its current $220 billion valuation to $300 billion by 2025.
Several companies, including Nayara Energy and Haldia Petrochemicals, have announced expansion plans.
Additionally, Petronet LNG is developing a petrochemical complex in Gujarat, featuring a 7,50,000 metric tons-per-year (tpy) propane dehydrogenation unit and a 5,00,000 tpy polypropylene unit.
Petronet LNG CEO Akshay Kumar Singh remarked, “The downturn in petchems has always been cyclical and we hope margins will recover in next three years.”
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