Strengthening Propylene Feedstocks to Induce Price Escalations in Polyether Polyol and Propylene Glycol Markets in India

A possible hike in propylene feedstock prices in India has spurred speculations regarding the impact on its downstream products Polyether Polyol and Propylene Glycol among the market participants in India. The Propylene Glycol market is currently enjoying stable supply-demand dynamics, which has caused the manufacturers, traders, and downstream buyers to perform transactions in a comfortable bubble. On the other hand, the Polyol market saw buoyed price trends resulting from the January effective price revisions by Asia’s key market players. However, the latest indications on feedstock volatility are expected to catch the traders and manufacturers off-guard causing the prices soon to plunge upwards.

India being an import parity market for propylene, performed stronger in the new year owing to the inflationary pressure from the globally rising crude oil prices as an effect of multiple factors. The fire breakout in ExxonMobil’s Baytown refinery in late December induced scarcities in propylene inventories in the USA which eventually rippled down to other countries. Furthermore, the turmoil in OPEC+ members, Kazakhstan and Libya during early January, hampered the supplies of crude oil to a significant extent, thereby giving room to price rise in the whole crude oil value chain across all regions. Taking support from the ongoing upheaval, the WTI crude oil has recently transcended the USD 90/barrel mark, sending tremors across the Indian Polyether Polyol and Propylene Glycol markets.

As per ChemAnalyst, the prices for Polyether Polyol and Propylene Glycol are expected to see a jump of 2-3% in the upcoming weeks as the propylene feedstock market is expected to exhibit an incessant firmness in contract prices. In addition to the skyrocketing crude oil prices, the weakening dollar with respect to rupees is also expected to have a bearing on the propylene market, impacting the polyol and Propylene Glycol supplies and fueling up their prices on account of the domino effect. The increased prices are expected to be reflected in the downstream polyurethane foam industries, eventually extending to the pockets of end-user customers.