Indian IPA Market Faces Bearish Sentiment on High Stocks, Year-End Slowdown

Key Highlights:

• Sharp Price Drop: Importers offering IPA at ₹92-93++/kg; bulk buyers aim for ₹87-88++/kg.
• Weak Demand: Downstream pharmaceutical industry cuts consumption amid financial year-end.
• Supply Glut: Increased imports in Jan-Feb vs. slow off-take causing inventory build-up.
• Stable Domestic Pricing: Deepak Phenolics maintains prices at ₹92-93/kg with extended payment terms.

IPA Price Trends & Market Sentiment 

• IPA prices have witnessed a sharp decline due to a surge in port inventory and weak downstream demand. Importers are offering IPA at ₹92++/kg Ex-Kandla and ₹93++/kg Ex-Mumbai on advance payment terms.
• Meanwhile, domestic producer Deepak Phenolics has maintained stable prices, with authorized dealer offers standing at ₹92-93/kg (Ex-Dahej) on 60-day payment terms.
• Bulk buyers have shown interest in purchasing at ₹87-88++/kg for April lifting; however, importers are reluctant to sell at these levels.

Chemical Demand & Supply: Demand Slowdown in Pharma Sector

• IPA imports increased significantly during January and February, supported by strong vessel arrivals. However, importers are under substantial pressure due to slow liquidation, driven by weak demand.
• The primary consumer segment, bulk drug manufacturers, has significantly reduced IPA consumption, with some traders citing that the financial year-end is prompting manufacturers to lower production rates and minimize inventory levels.
• India’s monthly IPA demand stands at approximately 21,000 tons. Domestic production from Deepak Phenolics and Deepak Fertilizers accounts for 10,800 tons per month, while imports supplement the market with an additional 10,000-11,000 tons monthly.

Market News: Global Petrochemical Maintenance Updates

• In the international market, upstream crude oil prices (WTI benchmark) declined by 0.36%, settling at $67.82 per barrel. Meanwhile, natural gas prices dropped to $3.92/MMBtu.
• LyondellBasell Industries (LYB) is planning to shut its Butadiene (BD) Unit in Q1 2025 for maintenance work. The Unit is located in Channelview, Texas, USA with a production capacity of 300,000 Tons/Year.
• Hanwha TotalEnergies Petrochemical Co is aiming to shut its Monoethylene Glycol (MEG) Unit for maintenance work. The Unit is located in Daesan, South Korea with a production capacity of 155,000 Tons/Year.
• Zhejiang Petroleum & Chemical (ZPC) is aiming to shut its Aromatics Units for maintenance work in H2 March, 2025. The Units are located in Zhoushan, China with a production capacity of 600,000 Tons/Year.
• Yulin Chemical is planning to shut its MEG Plant for maintenance work. The Plant is located in China with a production capacity of 400,000 Tons/Year.

Market Outlook & Expert Insights

It is anticipated that domestic IPA prices will continue to exhibit a bearish trend, primarily due to surplus port inventory and muted downstream demand.